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YOUR 

ORGANISATION 
& THE LAW 

A GUIDE FOR PNG CIVIL SOCIETY 



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About this handbook 



This handbook has been prepared as a joint initiative between CARE Australia, King & 
Wood IVIallesons, Posman Kua Aisi Lawyers and the Australian Attorney-General's 
Department. It was developed in response to a perceived need to build the legal capacity 
and regulatory awareness amongst non-governmental organisations and other civil society 
actors in Papua New Guinea. 

This handbook is not intended to be comprehensive or a substitute for professional advice. 
It is aimed at giving a general overview of some of the laws relevant to setting up and 
operating a non-governmental organisation in Papua New Guinea. 

It has been developed in consultation with a range of non-government organisations, 
donor organisations and government departments. We would like to thank the 
stakeholders who provided comments on drafts of this publication and during the in- 
country consultation visit. 

Particular thanks are also extended to the Australian Attorney-General's Department who 
provided a grant to assist with this project, and to the Australian Attorney-General's 
International Pro Bono Advisory Group for their support of this pro bono initiative. 

King & Wood Mallesons and Posman Kua Aisi Lawyers provided their time and legal 
expertise to the preparation of this handbook on a pro bono basis. The King & Wood 
Mallesons' team was led by Chloe Johnco, Zach Meyers and Josh Underhill. The team 
from Posman Kua Aisi Lawyers included Philip Wright, Miran Ai and Angela Koyati. The 
practical assistance of CARE Australia in developing this handbook, in particular, Daniell 
Cowley in Goroka, PNG, is also greatly appreciated. 



Posman Kua Aisi Lawyers is a prominent law firm in Papua New Guinea, based in Port 
Moresby. It has had an "in association" relationship with King & Wood Mallesons since 
1995. Contact details are: 



P.O. Box 228 Port Moresby 121 
1st Floor Mogoru Moto Building 
Champion Parade, Port Morseby, 121 
Papua New Guinea 
P (675) 3200127 
F (675) 3200361 

"be differenf 



Mr Kisakiu Posman 
kisakiu.posman@posman.com 
Mr Philip Wright 
philip.wright(a)posman.com 



Your Organisation 



1 
© King & Wood IVIallesons 




CARE Australia is a non-political, non-religious international humanitarian aid 
organisation fighting global poverty, with a special focus on empowering women and girls 
to bring lasting change to their communities. 
It is part of the CARE International family and 
has a significant presence in Papua New Guinea, 
having operated in the country for over 20 years. 

To contact CARE Australia, see: C3 1 G^ 

www.care.org.au Fijhii„s n^m pn-eny 

for 35 years 

King & Wood Maiiesons is a leading international law firm with a major presence in the 
Asia-Pacific. It has well established pro bono and community programs. The firm has a 
long standing relationship with CARE Australia and has had an "in association" 
relationship with Posman Kua Aisi Lawyers since 1995. King & Wood IVIallesons was 
formed by the ground-breaking alliance between IVIallesons Stephen Jaques and King & 
Wood in IVIarch 2012, and has 21 offices around the world. 

To contact King & Wood IVIallesons, see: k' I N C^ A \NO^ P) 

'^■'""^■°°"^ MALLESONS 

Tile Australian Attorney-General's International Pro Bono Advisory Group was 

established with the aim of building effective partnerships in overseas legal capacity- 
building and access to justice work. Its role 
is to strengthen the partnership between the 
Australian Government, the legal 

community and the non-government sector '"-■h^^^^J^*'' 

to facilitate projects that address ^n AustraJian Government Initiadw 

international law and justice needs. 

Important Note: 

The laws and regulations of Papua New Guinea are constantly changing. This handbook is intended only to 
provide a high level summary of the subject matter it covers as at October 201 1 and offers general guidance 
only. It does not purport to be comprehensive or to be a substitute for legal or other professional advice. 
Readers should not rely on the contents of this handbook and must seek professional advice before taking 
any action based on the content of this handbook. None of CARE Australia, King & Wood Maiiesons or 
Posman Kua Aisi Lawyers accepts any responsibility for any loss suffered by any person relying on the 
content of this handbook. King & Wood Maiiesons reserves all copyright and all other intellectual property 
rights in everything they have created in this handbook. We acknowledge that CARE Australia have 
provided a number of the photographs in this handbook which are reproduced with their permission. (Photo 
credits are acknowledged in endnote 1 or under the photo.) ^ You may make a temporary copy on your local 
computer for the purposes of viewing the content and print a single hard copy for personal use, provided any 
copyright notice is not removed. 

Your Organisation 2 

© King & Wood IVIallesons 




Contents 

1 Your Organisation 6 

Organisational structures 6 

1 Informal structures 8 

2 Incorporated associations 8 

3 Trusts 13 

4 Companies 15 

5 Co-operative societies 16 

6 Incorporated Business Groups 18 

7 Options for foreign organisations in PNG 19 

Governance 21 

1 Why is governance important? 22 

2 Wliat is the Committee of Management? 23 

3 What is the Management Team? 27 

Taxation 28 

1 Income tax 29 

2 Goods and services tax (GST) 34 

3 Business payments tax 37 

4 Other types of tax 37 

IVIanaging risk 41 

1 Risk management 42 

2 Insurance 47 

2 Your people 51 

Employment 51 

1 Types of employees 52 

2 Hiring people 56 

3 Employment contracts 59 

Your Organisation 3 

© King & Wood Mallesons 



4 Employees' rights 61 

5 Employment policies 65 

6 Health and safety at work 65 

7 Deducting tax from employees' salary 69 

8 Misconduct and termination of employment 71 

Discrimination 74 

1 What is unlawful discrimination? 75 

2 Avoiding unlawful discrimination 76 

3. Your property 77 

Leasing land and premises 77 

1 Leasing Property 78 

2 Entering into leases 80 

3 Dealing with leases 82 

Intellectual Property 84 

1 Overview of IP 85 

2 Copyright 85 

3 Trade marks 87 

4 Patents 89 

5 Industrial Designs 90 

6 Protecting your IP 90 

7 Business Names 92 

8 Using other people's IP 93 

4 Your operations 95 

Contracts 95 

1 Preparing to enter a contract 96 

2 Entering into a contract 98 

3 Your organisation's obligations 98 

4 Understanding contracts 100 

Your Organisation 4 

© King & Wood Mallesons 



5 Resolving problems and obtaining remedies 102 

6 Ending a contract 103 

Dealing with the public 105 

1 Buying and selling goods and services 106 

2 Public communications and publications 109 

HIV/AIDS 111 

1 Unlawful discrimination on the basis of HIV/AIDS status 112 

2 Unlawful screening 113 

3 Unlawful stigmatisation 113 

4 Unlawful denial of access to protection 114 

5 Testing, counselling, reporting and confidentiality requirements 114 

6 Ensuring your organisation complies with the HAMP Act 116 

Child protection 117 

1 The guiding principles of child protection laws 118 

2 The scope of child protection laws 119 

3 Obligations on organisations employing children 119 

4 Obligations on all organisations that come into contact with children 120 

5 Organisations that have responsibility for children 121 

Government Department Directory 122 



Your Organisation 5 

© King & Wood Mallesons 



1 Your organisation 

Organisational structures 



Organisations have a choice of structures under which to operate in PNG,^ including: 

• an informal structure (ie operating as a group of individuals without any 
incorporated entity); 

• an incorporated association; 

• a trust; 

• a company; 

• as a co-operative society; or 

• an Incorporated Business Group. 

This section gives a brief overview of the various structures open to organisations, and 
some guidance on establishing these entities. 

An incorporated association is likely to be the most favourable structure for most non-profit 
organisations. A smaller organisation might also consider being structured as a co- 
operative society in certain circumstances. 



Your Organisation 7 

© King & Wood Mallesons 



1 Informal structures 



2 Incorporated associations 



1.1 What is an informal structure? 

An informal structure is winere an 'organisation' 
carries out its activities witinout a formal legal 
structure - for example a few persons working 
together to achieve a goal or a single person 
carrying on a small business. 

1.2 What are the advantages of an informal 
structure? 

An informal structure: 

■ is simple; 

■ is inexpensive; 

■ does not require any formal application to be 
made to form the organisation; and 

■ does not have specific reporting, tax or similar 
obligations. 

1.3 What are the disadvantages of an 
informal structure? 

The major disadvantage of using an informal 
structure is that the organisation is not legally 
separate from the persons who participate in it. 

This means that: 

■ people who are owed money by the 
'organisation' can recover the money by suing 
those persons (instead of suing the 
'organisation'); and 

■ the persons themselves must enter in 
contracts and own any relevant property for 
the organisation, rather than the organisation 
doing so itself. 

This can make it difficult to continue to run the 
organisation when a person stops being involved. 
For these reasons, it is generally advisable not to 
use an informal structure. 

FUNDING REQUIREMENTS 
Many donor organisations will only provide funding 
to incorporated entities and individuals may not be 
able to access tax benefits available to other 
entities. This can make it more attractive to 
choose an alternative structure. 



2.1 What is an incorporated association? 

An incorporated association is a structure reserved 
for non-profit organisations that are formed for 
purposes considered to be useful to the 
community. It allows a non-profit organisation to 
incorporate as a separate legal entity without 
imposing many of the obligations that apply to 
types of for-profit incorporated entities (for 
example, companies). 

2.2 What are the advantages of an 
incorporated association? 

Operating as an incorporated association provides 
an organisation with the advantages of being a 
separate legal entity. These advantages include: 

■ perpetual succession (meaning that the 
organisation continues to exist even if the 
people involved in it change); 

■ the ability to own and deal in property, sue 
(and be sued), sign contracts and exercise 
other legal rights and obligations in its own 
name; and 

- the members of an incorporated association 
are usually not personally liable for the 
organisation's debts. 

At the same time, incorporated associations do not 
need to comply with many of the reporting 
obligations that are required for other types of 
organisation structures. 

2.3 What are the disadvantages of an 
incorporated association? 

The principal act governing incorporated 
associations is the Associations Incorporation Act 
1 966 (A\ Act). 

Incorporated associations need to comply with 
certain eligibility criteria. For example, the 
organisation must ensure that: 

■ it promotes an object that is 'useful to the 
community'; and 

■ all of its profits are applied towards promoting 
this object. An organisation operating as an 



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© King & Wood Mallesons 



incorporated association cannot distribute 
profits to its members. 

Tine Registrar of Companies (Registrar) may also 
revoke the incorporation of any association tinat, in 
inis opinion, no longer fulfils the criteria."* However, 
this revocation may be appealed before a 
Magistrate.^ 

There is also a range of record keeping and 
reporting obligations imposed on incorporated 
associations. 

Within 14 days of the certificate of incorporation 
being granted, your organisation must appoint a 
public officer, who must ordinarily reside in PNG.^ 
The officer must, in turn, inform the Registrar within 
14 days (Form 6).^ Because the contact person's 
details are lodged with the Companies Office, he 
or she is the point of contact for the association 
and is responsible for lodging documents with the 
Companies Office. 

An incorporated association is required to have a 
committee of two or more people (or as specified 
in the organisation's Rules). The committee is 
responsible for overseeing the management of the 
association and ensuring that the rules of the 
association and the Act are complied with. Refer 
to the Governance section for more discussion of 
the role of committees generally. 

An incorporated association is required to keep 
records in accordance with its rules, including: 

■ a register of members; 

■ a register of officials and committee members; 
- minutes of meetings; and 

■ accounts. 

The financial affairs of an association must be 
'properly audited by a competent person' who is 
independent of the association, at least once every 
12 months.® 

2.4 How is an incorporated association 
formed? 

The registration and regulation of incorporated 
associations is under the Registrar of Companies, 
which is part of the Investment Promotion Authority 
(IPA). 

WHAT TYPES OF ORGANISATIONS MAY OPERATE 
AS INCORPORATED ASSOCIATIONS? 

An 'association' is broadly defined as any 
'association, society, club, institution. Christian 



mission or other body in the country'. In order to 
be eligible for incorporation, an association must:*° 

- be formed, or be operating, for the purpose of: 

o providing recreation or amusement; or 

o promoting commerce, industry, art, 
science, religion, charity, pension or 
superannuation schemes or other objects 
useful in the community; 

■ apply its profits, or other income, to promoting 
its objects; and 

■ not distribute to its members any dividend, or 
payment in the nature of a dividend. 

HOW DOES AN ASSOCIATION INCORPORATE? 

'Incorporation' means that a separate legal entity is 
created. The law recognises such an entity as 
different from its employees and members. 

An organisation wishing to incorporate an 
incorporated association must do the following 
(these steps are outlined in Figure 1): 

1 Meeting: Hold a meeting at which a 
Committee (being 2 or more persons - see the 
Governance section for more information): 

o authorises a person to apply for 
incorporation; 

o agrees upon a statement of the objects of 
the association; 

o approves a set of Rules;^^ and 

o nominates the initial members of the 
Committee of the association (at least two 
people). 

2 Prepare notice: Prepare a notice of intention 
to apply for incorporation (Notice), in 
accordance with Form 1 of the Associations 
Incorporation Regulations 1966 (Al 
Regulations).^^ The notice must detail how 
the organisation satisfies the criteria for 
incorporation. The name of your association 
should not include 'Inc' at this stage as it is not 
incorporated yet.^^ Also note that the Registrar 
can refuse to register a name that it considers 
undesirable. ^"^ 

3 Lodge notice: Submit (through the person 
authorised at the meeting in Step 1) the 
prepared Notice to the Registrar for approval. 
If the Registrar does not grant approval, your 
association may be able to re-submit the 



Your Organisation 



© King & Wood IVIallesons 



application after making appropriate cinanges 
to the notice. 

4 Publish notice: Once tine Registrar lias 
approved tine Notice, publisin tine Notice in a 
nationally circulating newspaper which is 
published at least once a week (this is likely to 
be either the PNG Post Courier or the 
National). If there is special reason to do so, 
the Registrar may direct the manner of 
publication of the Notice. Keep copies of the 
publication for your organisation's records and 
for inclusion with the final application for 
incorporation. 

Your organisation must wait for a period of 1 
month after publication, during which other 
persons may lodge objections to your 
organisation's intention to incorporate.^^ If an 
objection is lodged against your organisation's 
notice, section 4 of the A! Act sets the process 
by which you can seek its resolution. ^® 

5 Lodge application: Once the one month 
publication period is over, apply to the 
Registrar for incorporation in accordance with 
section 6 of the A! Act and Form 2 of the A! 
Regulations. Note that the name of your 
association should now include 'Inc'^^ and 
when the association is incorporated, this is 
the name it must use on documents. ^^ The 
application must be accompanied by: 



a copy of the Rules of your 
association 



19 



The Rules of an incorporated association 
must address certain issues, including the 
name and object of the association, 
procedures regarding its management and 
the use of association funds. ^° The full list 
is set out in Figure 2. 

Model Rules for an incorporated 
association have been prepared by the 
Registrar and it is generally a good idea to 
base the rules for your association on 
these rules, unless your organisation has 
specific requirements or advice. Model 
Rules can be downloaded from PNG 
Institute of Directors or obtained from the 
I PA. 



21 



The Model Rules can be adopted by 
attaching to the application a statement 
setting out the date of the meeting at which 
the Rules were adopted, a copy of a 



special resolution adopting the Model 
Rules and any modifications made to the 
Model Rules by the association;^^ 

o a copy of any trusts relating to your 
association; 

o a statutory declaration^^ declaring: 

' that the applicant is authorised by the 
committee of the association to apply 
for the incorporation of the association; 

■ that the Notice was published in a 
newspaper (giving the date and 
details); 

■ that the particulars contained in the 
application are true;^"* and 

■ that the copies of the Rules and any 
trusts or deeds provided with the 
application are true copies;^^ and 

o a copy of the newspaper containing the 
published notice. 

If the Registrar is satisfied with your organisation's 
application, it will grant your organisation a 
certificate of incorporation.^® Within 14 days of 
receiving its certificate of incorporation, your 
organisation must appoint a public officer (see part 
(c) 'Obligations of an incorporated association' 
below). The public officer is the Registrar's point 
of contact with the organisation. 

The forms required to incorporate can be obtained 
from the I PA. 

Within 14 days of the certificate of incorporation 
being granted, your organisation must appoint a 
public officer, who must ordinarily reside in PNG. 
The officer must, in turn, inform the Registrar within 
14 days (using Form 6). Because the contact 
person's details are lodged with the IPA, he or she 
is the point of contact for the association and is 
responsible for lodging documents with the IPA. 

2.5 How is an incorporated association 
ended? 

An incorporated association may be voluntarily 
wound-up by agreement among 75% of its 
members.^^ 

The Registrar also has the power to unilaterally 
cancel the incorporation of an association if they 
believe that the association is no longer fulfilling 
the eligibility requirements.^® A decision by the 
Registrar to cancel incorporation can be appealed 
before a magistrate.^® 



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© King & Wood IVIallesons 



FIGURE 1: INCORPORATING AN ASSOCIATION 



STEP 1 : 

Hold a meeting to approve 

the rules, the objects, the 

initial committee members 

and application. 



STEP 2A: 

Address the concerns of the 
Registrar of Companies and re- 
lodge if possible. 



STEP 2: 

Prepare a notice of intention 

to incorporate and lodge with 

the Registrar of Companies 

for approval. 



r-. 



Was the Notice of 
Intention approved? 



No 



I 



Yes 



STEP 3A: 

Make representations to the 

Registrar regarding the 

objection(s) if appropriate. 

Await the Registrar's decision. 



STEP 3: 

Publish the notice in a 

nationally circulating 

newspaper. 



Wait one month. 



Were any objections made 
during the one month? 



Yes 



1 



No 



Did the registrar disregard the 
obiectionfsl? 



No 



Yes 



STEP 4: 

Lodge an application for 

incorporation with the 

Registrar of Companies, with 

all required attachments. 



STEP 6: 

Appoint a public officer 

within 14 days of receiving 

your certificate of 

incorporation. 



STEP 5: 

Wait for your certificate of 
incorporation. 

Your organisation is now 
incorporated. 



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© King & Wood Mallesons 



FIGURE 2: THE RULES OF AN INCORPORATED ASSOCIATION 



The following matters need to be addressed in the 
Rules of an incorporated association. ^° 

1 The name of the association. 

2 The objects and purposes of the association. 

3 The qualifications (if any) for membership of 
the association. 

4 The donations or subscriptions (if any) to be 
made or paid by members of the association. 

5 The names, constitution, membership and 
powers of the general committee, board of 
management or other governing authority of 
the association (in this item referred to as 'the 
committee') and- 

(a) the election or appointment of members of 
the committee; 

(b) the terms of office of members of the 
committee; 

(c) the grounds on which, or reasons for which 
the office of a member of the committee 
becomes vacant; 

(d) the filling of casual vacancies occurring on 
the committee; 

(e) the quorum and procedure at meetings of 
the committee; and 

(f) the quorum and procedure at meetings of 
sub-committees appointed by the committee. 

6 The quorum and procedure at general 
meetings of members of the association and of 
sub-committees appointed by any such 
meeting or constituted or established under the 
rules of the association. 

7 The time within which, and the manner in 
which, notices of meetings and notices of 
motion are to be given, published or circulated. 

8 The sources from which the funds of the 
association are to be or may be derived. 

9 The manner in which the funds of the 
association are to be managed and, in 
particular, the mode of drawing and signing 
cheques, drafts, bills of exchange, promissory 
notes and other documents for and on behalf 
of the association. 



10 The intervals between general meetings of 
members of the association, the manner of 
calling general and special meetings and the 
requisite notices of meetings of the 
association. 

1 1 Whether the accounts of the association are to 
be audited annually or more frequently, the 
manner of appointing and removing auditors 
and the powers and duties of auditors. 

12 The manner of altering and rescinding the 
rules and of making additional rules. 

13 Provision for the custody and use of the seal of 
the association. 

14 The manner in which the objects or purposes 
of the association may be altered. 

15 The form, custody and use of the common seal 
of the association. 

16 The custody of books, documents and 
securities of the association. 



Note that the Rules must also include provisions 
for the following: 

(a) for the making and keeping of a register of 
members; 

(b) for the making and keeping of a register of 
officials and committee members; 

(c) for the use of proxies (if any) at meetings; 

(d) as to what matters (if any) may be resolved by 
postal ballot; 

(e) as to how members are admitted and how they 
cease to be members; 

(f) whether rights of members are transferable or 
transmittable and under what circumstances; 

(g) for the keeping of minutes of meetings; 
(h) for the keeping of accounts; and 

(i) as to the liability of members on a winding-up. 

However, the Registrar may exempt an 
incorporated association from needing to address 
these matters. ^^ 



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© King & Wood Mallesons 



3 Trusts 

3.1 What is a trust? 

A trust is a legal arrangement where property that 
is legally owned by one party (the trustee) is 'held 
on trust' for the benefit of others (the 
beneticiaries). The beneficiaries may be people 
or organisations or, as often in the case of an 
organisation, a 'charitable purpose' (described as a 
'charitable trust'). 

For example an organisation could be appointed 
as the trustee of a trust. It would own the relevant 
property and carry on its operations in furtherance 
of its stated charitable purpose. However the 
organisation would be required to only use the 
property towards the relevant purpose and 
otherwise act in accordance with its duties as 
trustee (see below for further information on 
trustees' duties). 

The key benefit of operating as a charitable trust 
(as opposed to other types of trusts) is the 
availability of income tax exempt status. To be an 
income tax exempt charity, an organisation must 
ensure that its purpose is 'charitable' under the 
legal definition of this concept. The legal meaning 
is narrower than the common meaning. See below 
for further information, as well as the Taxation 
section. 



THE LIMITATIONS OF TRUST STRUCTURES 
Trusts are only likely to be suitable for 
organisations whose activities fall within the 
definition of a charitable trust and who are 
motivated by the tax-free status of charitable trusts 
and: 

■ which involve a small number of people and 
are comfortable with a relatively informal 
management structure and the personal 
liability of an individual trustee; or 

■ are large organisations who are able to 
incorporate a trustee company and manage 
the associated formalities, and which are 
comfortable with their assets remaining in a 
trust which may be difficult to dissolve (and 
subject to uncertainty about the rules relating 
to winding up). 

Trusts are therefore unlikely to be attractive for the 
majority of organisations. 



3.2 What are the advantages of a trust? 

There are two advantages for an organisation 
using a trust structure: 

■ the relatively minimal formalities involved in 
establishing a trust mean that an organisation 
can set itself up as a trust by simple written 
agreement of its members (although it is 
recommended that legal advice be obtained in 
setting up a trust); and 

■ a charitable trust (as opposed to other types of 
trusts) may be exempt from certain taxes. 

The rights of a trustee include those contained in 
the Trustees and Executors Act 1961 (IE Act). 
The TE Act regulates the trustee's power to, 
among other things, make new investments, to 
deal in trust assets, to renew leases and to appoint 
new trustees. ^^ The powers of a trustee are also 
governed by the terms of the trust deed, and are 
subject always to the restrictions and obligations 
imposed on trustees (see below). 

3.3 What are the disadvantages of a trust? 

There are three major disadvantages for an 
organisation using a trust structure: 

■ an organisation operating as a trust is not a 
separate legal entity. As such, only the trustee 
(on behalf of the trust) and not the trust itself 
enters into contracts, owns property and sues 
and is sued; 

■ as a consequence, the trustee is personally 
liable for all debts and obligations incurred by 
the trust. The trustee is also personally liable 
for any misuse of trust funds. For this reason, 
it is highly advisable that an organisation use 
an incorporated entity (such as a company) as 
trustee (which adds an extra layer of 
complexity); and 

■ a charitable trust is difficult to dissolve. 
Normally, dissolution requires that the assets 
of a charitable trust be transferred to another 
charity with identical or similar charitable 
purposes, which can have practical difficulties. 

Stamp duty may be also payable on the 
declaration of trust instrument. 

A trustee of a trust is subject to extensive 
obligations, including that: 

■ in general, a trustee of a charitable trust can 
only use trust funds for the advancement of the 
trust's charitable purpose. A trustee may be 



Your Organisation 



13 
© King & Wood IVIallesons 



permitted to invest trust moneys, provided tinat 
it is done properly, in good faitin, and for tine 
benefit of tine trust. Tine TE Act explains this 
obligation further; 

■ a trustee also has a duty of care to the 
beneficiaries (or the charitable purpose), and 
must act in the best interests of the 
beneficiaries and avoid conflicts of interests 
between this duty and its own interests. 
Because a trust is not a separate legal entity, 
the trustee is personally liable for all debts and 
obligations incurred by the trust. 

As such, it is usually preferable to use an 
incorporated entity (ie a company) as trustee to 
minimise its members' exposure to liability. This 
adds some complexity to establishing and 
operating under this structure. 

3.4 How is a trust formed? 

WHAT TYPES OF ORGANISATIONS MAY OPERATE 
AS TRUSTS? 

In order for an organisation to operate validly as a 
'charitable trust', its purpose must qualify as 
'charitable' under law. Importantly, the concept of 
a 'charitable purpose' is much narrower under its 
legal usage than it is in general usage. 

The Income Tax Act /959 defines a 'charitable 
purpose' as any of: 

- relief of the poor; 

■ education; 

■ medical relief; or 

■ any other object of general public utility not 
involving an activity for profit. 

The trust deed for the trust needs to provide for the 
charitable purposes of the trust and state that the 
trust's assets can only be used for those charitable 
purposes. 

An organisation whose purpose does not qualify as 
'charitable' can still exist and operate as a trust. 
However, it is not eligible for income tax exempt 
status (which is the key advantage of operating an 
organisation as a trust). See the Taxation section 
for further information. 

WHAT IS THE PROCESS FOR SETTING UP A 
TRUST? 

The formalities involved in forming a trust are 
minimal. Usually, it is sufficient for a written 



document (eg a Trust Deed or a Declaration of 
Trust) to be executed that specifies: 

■ the assets which will be trust property; 

■ the charitable purpose(s) of the trust; and 

■ a trustee who will be responsible for managing 
the trust. 

It is recommended to have a lawyer draft the trust 
documents to ensure the formal requirements are 
met and to determine if any stamp duty is payable. 

3.5 How is a trust ended? 

There are two main ways to terminate a charitable 
trust: 

- the exhaustion of all trust assets in furtherance 
of the trust's charitable purpose; or 

- if permitted under the trust instrument, the 
transfer of all trust assets to another charity 
with similar charitable purpose. 

This can make a trust structure inflexible. It can be 
difficult to repurpose the trust assets if the trustee 
organisation decides to adopt a different purpose, 
or its original purpose becomes obsolete. It is 
advisable to obtain legal advice before setting up a 
trust. 



Your Organisation 



14 
© King & Wood Mallesons 



4 Companies 



4.1 What is a company? 

A company is an incorporated entity witin a 
separate legal personality to its members. It is 
owned by its 'members' (usually described as 
'shareholders') who contribute capital and 
expertise to the company with a view to furthering 
a common (usually profit-making) cause. 

4.2 What are the advantages of a 
company? 

A company structure has some of the same 
advantages as those enjoyed by incorporated 
associations, for example, being a separate legal 
entity, having the ability to deal in property in its 
own name, limited liability and so on. The 
difference is that a company structure is available 
to a wider range of associations (including for-profit 
associations). 

Unlike an incorporated association, a company can 
be run for profit and can provide a financial return 
to the shareholders who have invested in it. This 
may be appropriate for certain types of socially 
responsible business organisations, though it 
generally means that the management of the 
company are required to act in the shareholders' 
interests above the other goals of the organisation. 

4.3 What are the disadvantages of a 
company? 

A company is subject to onerous reporting 
obligations, including obligations to prepare and 
lodge financial statements, keep accounting 
records, appoint auditors and prepare annual 
reports. 

Smaller companies (being companies that have 
assets worth less than K5 million, no more than 25 
shareholders, and no more than 100 employees) 
are subject to lesser requirements for audits 



33 



34 



Incorporated associations, by contrast, are spared 
many of the more complex requirements applied to 
companies. 

The financial reporting obligations under Divisions 
XI. 1 and XI. 2,^^ as well as the obligation to lodge 
annual returns,^® also apply to foreign registered 
companies. ^^ 

Additionally, comparatively onerous duties are 
placed on directors of companies (including being 
personally liable for certain taxation obligations of 



the company). As noted above, the management 
of the company are required to act in the 
shareholders' interests, which may not be the 
same as the goals of the organisation. 

4-4 How is a company formed? 

Companies are principally governed by the 
Companies Act 1 997 (CA) and also by the 
common law. 

WHAT TYPES OF ORGANISATIONS MAY OPERATE 
AS COMPANIES? 

Any person or persons may apply to register a 
company.^® 

However, the CA requires a company to have 
shares and shareholders.^^ A company cannot be 
limited by guarantee, which is a structure 
commonly used by charitable organisations in 
other jurisdictions (eg Australia). This means 
shareholders in PNG companies must: 

■ invest capital into the company; and 

■ accept 'limited or unlimited liability for the 
obligations of the company'. ''° 

This means there is no guarantee that a 
shareholder will be able to get their investment 
back. However, if the company is a 'limited 
liability' company, its shareholders will not be liable 
to pay more than the amount they invested or 
agreed to invest. 

Companies incorporated in a jurisdiction outside 
PNG which carry on a business in PNG must also 
apply for registration as an overseas company 
under the CA within one month of commencing 
carrying on a business in PNG."*^ 'Carrying on a 
business' is defined broadly and includes activities 
that an organisation might engage in, such as 
maintaining an office in PNG 



42 



WHAT IS THE PROCESS FOR SETTING UP A 
COMPANY? 

An application for registration must be submitted to 
the Registrar of Companies in the form set out in 
the Companies Regulations, together with a 
reservation for the company name and a certified 
copy of the company's constitution'*^ (if any). In 
the absence of a constitution, the Act sets out 
default arrangements that apply.'*'* The Registrar 
will then register the application and issue a 
certificate of incorporation.'*^ 



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If your organisation decides that a company is a 
desirable structure, your organisation may wish to 
seek professional advice about setting up and 
running a company. The forms required to 
incorporate a company and further information are 
available from the IPA. 

4.5 How is a company ended? 

A company can be may voluntarily liquidated 
(wound up) by special resolution (ie a vote carried 
by 75%) of its shareholders. Alternatively, the 
Constitution of the company may specify certain 
events that would trigger liquidation automatically, 
which the board of directors would then implement. 

Additionally, under certain circumstances, a Court 
may order that a company be liquidated, for 
instance, where the Court is 'satisfied that the 
company is unable to pay its debts as they 
become due in the ordinary course of business' 



46 



Upon liquidation, the company's assets are sold- 
off, its debts are repaid, and the surplus (if any) is 
distributed among its members. 



5 Co-operative societies 

5.1 What is a co-operative society? 

A co-operative society (CS) is 'an autonomous, 
united and voluntary association of persons, 
usually with limited resources, that come together 
to meet their common economic, social and 
cultural needs and aspirations'.'*'' 

In essence, CSs are informal organisations which 
allow persons to pool their resources to achieve 
outcomes which they could not achieve without 
such collectiveness. 

CSs are said to be different from other forms of 
associations due to their seven key principles:'*^ 
voluntary and open membership; democratic 
member control; autonomy and independence; 
equal membership; commitment to education, 
training and information; co-operation among other 
CSs; and concern for the community, particularly 
local communities. 

5.2 What are the advantages of a co- 
operative society? 

The concept of a CS is best applied to small, 
grass-roots, locally driven initiatives. As such, they 
are unlikely to be used as a structure for larger 
organisations or organisations engaged in 
initiatives across different areas in PNG 



49 



Upon registration, a CS enjoys similar rights to that 
of an incorporated company or incorporated 
association: the CS is regarded as a corporation 
by the name under which it is registered, has the 
ability to enter into contracts, hold property and 
institute and defend legal proceedings. 

One advantage of using a CS as a structure over 
using an incorporated association, is that different 
criteria apply to their establishment. (See the 
discussion above on incorporated associations.) 
In particular, an organisation that is for-profit, but 
which desires to promote co-operative principles, 
may qualify to establish as a CS, but they would 
not qualify as an incorporated association. 

The liability of a member of a CS is limited to the 
nominal value of shares held by him/her, in 
addition to any fees or charges due and unpaid by 
him or her to the society.^" 



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5.3 What are the disadvantages of a co- 
operative society? 

As discussed above, the CS structure is mucin 
more suited to iocaiiy driven projects and 
initiatives, particuiariy tinose of an agricuiturai 
nature, rather than most organisations operating in 
PNG. 

Furthermore, a CS must have at least 7 members 
who are PNG Citizens, and so this form of 
association may be inappropriate for foreign 
organisations. 

Similar to an incorporated association, there are 
numerous matters that must be included in the 
rules of a CS, and the CS has to comply with those 
rules. (For example, by holding meetings, 
appointing directors, managing a register of 
shareholders and having a registered office etc.). 
A CS must: 

■ hold an Annual General Meeting within 3 
months of the end of each financial year;^^ 

■ have directors' meetings at least every 3 
months;^^ and 

■ have a registered office with: 

o a sign in a form approved by the Registrar 
showing its registered name;^^ and 

o copies of the Co-operative Societies Act, 
the rules of the CS, the last balance sheet 
and accounts, the certificate of registration, 
every charge, and prescribed registers and 



accounts 



54 



In practice, CS are generally seen to be intended 
to realise government policy and are subject to a 
higher degree of supervision by the Registrar of 
Co-operative Societies (in this part, the 
'Registrar') than an incorporated association or a 
company. ^^ 

5.4 How is a co-operative society formed? 

CSs are principally governed by the Co-operative 
Societies Act 1982. 

WHAT TYPES OF ORGANISATIONS MAY OPERATE 
AS CO-OPERATIVE SOCIETY? 

In order to apply for registration as a CS, your 
organisation must have at least seven PNG 
citizens as members, 'who desire to promote 
common economic and social interest in 
accordance with co-operative principles'.^^ 
Proposed members should voluntarily agree to 



pool their resources in order to meet a common 
goal. 

WHAT IS THE PROCESS FOR SETTING UP A CO- 
OPERATIVE SOCIETY? 

Before applying for registration, the prospective 
members (numbering at least seven) should hold a 
meeting at which: 

■ the members should produce a written 
statement showing: 

o the objects of the proposed society^^ and 
the reason for believing that the proposed 
society will be able to achieve its 
objectives (Form 4); and 

o the rules under which the proposed society 
will operate^® (see the model rules and the 
required contents of rules under the Co- 
operative Societies Act);^^ 

■ each member should sign an application form 
for membership®" (which should specify the 
number and value of shares applied for and 
paid for by the prospective member, noting 
that no member can hold more than a fifth of 
the shares)®^ and a register of members 
should be established using the form in the 
application form; ®^ and 

■ the members should then elect a Board of 
Directors and any other officers provided for in 
the rules approved at the meeting.®^ 

Within two months of their election, the Directors 
must apply to the Registrar for registration of the 
society (Form 1, attaching the documents listed in 
the Form). 

The Registrar can then issue a certificate, at which 
time the society will be incorporated.®'' The 
Registrar can refuse to register the society, giving 

65 

reasons. 

5.5 How is a co-operative society ended? 

A CS may be wound up via methods including: 

■ a voluntary winding up occurring by way of a 
special resolution of members; 

■ a compulsory winding up by the Registrar, on a 
number of grounds (eg that the number of 
members of the CS is less than seven); and 

■ a compulsory winding up by order of a Court. 

If a CS is wound up through one of the above 
means, the Registrar or Court is required to 
appoint a liquidator. 



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6 Incorporated Business 
Groups 

6.1 What is an incorporated business 
group? 

An incorporated business group or IBG is an 
incorporated structure available to 'customary 
groups' that wish to undertake business and other 
economic activities 



66 



6.2 Wliat are tlie advantages of an 
incorporated business group? 

IBGs are designed to suit the needs of customary 
groups, for example by providing recognition for 
groups who observe customary practices and 
traditions, and by providing a legal vehicle for such 
groups who wish to engage in business activities. 
The advantages are similar to those of other 
incorporated entities. 

6.3 What are the disadvantages of an 
incorporated business group? 

IBGs are specifically designed to aid 'customary 
groups', and the Registrar may refuse 
incorporation if it is not satisfied that the members 
of the organisation are members of a customary 
group. ®^ The Registrar can also direct an IBG to 
apply for incorporation under a different structure if 
it believes that would be more appropriate. 

While less burdened by regulation than 
companies, an IBG is still quite heavily regulated. 
In particular, an IBG must still undergo a 
registration process with the I PA. 

6.4 How is an incorporated business group 
formed? 

IBGs are regulated by the Business Groups 
Incorporation Act 1974 (IBG Act).This gives IBGs 
the power to conduct business enterprises, to 
borrow money, to acquire and dispose of land, and 
other ancillary powers 



68 



The IBG Act also encourages the self-resolution of 
disputes within the groups, without going to court. 



WHAT TYPES OF ORGANISATIONS MAY OPERATE 
AS INCORPORATED BUSINESS GROUPS? 

An organisation must comprise a 'customary 
group' to be incorporated as an IBG. 'Customary 
group' refers to a group of people who regard 
themselves, and are regarded by others, as being 
bound by the customs of a group of people in 
PNG.®^ 

WHAT IS THE PROCESS FOR SETTING UP A 
COMPANY? 

An IBG may be formed by completing and 



submitting four key forms 
from the I PA: 



70 



These are available 



Form A: An application for Incorporation; 

Form B: Comments by the Proposed Dispute 
Settlement Authority for the proposed 
Business Group; 

Form C: Comments by a Business 
Development Officer; and 

Form D: Draft Constitution. 



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7 Options for foreign 
organisations in PNG 

7.1 What registration is required? 

An organisation tinat wisines to operate in PNG and 
is 50% or more owned, controlled or managed by 
non-PNG citizens must apply to the IRA for a 
certificate. 

However, an organisation is exempt from this 
requirement if it is: 

■ primarily for religious, charitable, educational 
or some other socially useful purpose; or 

■ for a non-profit purpose that is socially 
desirable and to be encouraged; or 

■ for a combination of any of the above purposes 
specified. 

To obtain the exemption, your organisation needs 
to apply to IPA and advertise its intention to apply 
for an exemption in a newspaper. The IPA 
contains further information about this process on 
their website. 

To be eligible for the exemption, the organisation 
must be a registered foreign company, a PNG 
company or an incorporated association. 

7.2 Whicli organisational structures are 
most appropriate? 

Some larger international organisations may 
consider operating in PNG as a 'branch office' of 
the overseas entity. Although this may be initially 
convenient, it is likely to make it difficult to be 
eligible for tax exemptions and other benefits of 
incorporation . Additionally, in the longer term, it is 
generally preferable to have a separate entity that 
can deal on its own behalf (for example, 
employing individuals, leasing premises and 
entering into other contracts). 

To be a legally recognised entity in PNG, the 
foreign organisation should be registered as: 

■ an incorporated association; or 

■ a company (or foreign company). 

In some circumstances, a trust structure may also 
be appropriate. 



RESOURCES 

Incorporated Associations '""" 

Associations Incorporation Act 1966, Associations 
Incorporation Regulation 1966 

Companies 

Companies Act 1997, Companies Regulation 
1998, Companies Rules 

Trusts 

Trustees and Executors Act 1961 

Cooperative Societies 

Co-operative Societies Act 1982, Co-operative 
Societies Regulation 2003 

Incorporated Business Groups 

Business Groups Incorporation Act 1 974, Business 
Groups Incorporation Regulation 1974 

Ottier 

Business Names Act 1963, Business Names 
Regulation 1964 

Note: At the time of publication tiie Business 
Names Act is being amended. 

FURTHER INFORMATION 
The Investment Promotion Agency website 
(www.ipa.gov.pg) contains copies of the forms 
required to register a company or incorporated 
association, as well as general information on 
registering organisations. In particular, it also 
contains a number of fact sheets and helpful 
publications on incorporating an association, the 
duties of a director and the certification of foreign 
enterprises. 

The website of AT Projects 
(www.global.net.pg/atprojects/manage.htm) 
contains information about setting up and running 
non-profit organisations in PNG. It includes a 
model constitution, copies of some IPA forms and 
other materials. 



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FACT SHEET: CHOOSING A STRUCTURE FOR YOUR ORGANISATION 



^^ 


^^^^^^KTiTrr^n^wr&^^^r 


^^^^ 


^^^^^Ktf^^K^^K^^^^^^^^^^^^ 


Informal 
structure 


A structure that has not been 

formalised (eg people working 

together to achieve a certain 

goal, or a single person carrying 

on fundraising or activities alone) 


• Simple and inexpensive 

• No incorporation costs or requirements 

• Minimal regulatory obligations and costs 


• Not a separate legal entity 

• Persons carrying out activities must enter into 
contracts and accept liability for those 
contracts themselves 

• Donor organisations may only provide funds 
to incorporated entities 


Incorporated 
Association 


A type of incorporated structure 

reserved for non-profit 
organisations that aim to achieve 
a charitable or beneficial purpose 


• Organisation continues even when people 
involved in organisation change 

• Separate legal entity with limited liability for 
members 

• Minimal regulatory requirements 


• Must be not-for-profit and promoting an object 
useful to the community 

• Some record keeping, reporting and auditing 
obligations and related costs 


Trust 


An arrangement whereby the 
assets of an organisation are 
held by a trustee, who must use 
the assets in furtherance of a 
particular charitable purpose 


• Potentially minimal set up requirements (if not 
using an incorporated trustee) 

• Potential tax benefits (if meet the definition of 
'charitable purpose') 


• Not a separate legal entity (trustee must enter 
into contracts on behalf of the trust and 
accept liability) 

• Trustee has extensive and strict obligations 

• Can be difficult to dissolve 


Company 


A legal entity separate from its 

members, who contribute capital 

in furtherance of a common goal. 

The structure most favoured by 

for-profit commercial 

organisations 


• Separate legal entity with limited liability for 
members 

• Potential tax benefits (but mainly for 
commercial enterprises) 

• Allows distribution of profits to members 


• Expensive and onerous to incorporate 

• Extensive and ongoing auditing, reporting and 
other obligations 

• Onerous obligations on directors 

• Directors must act on shareholders' interests, 
not purposes of the organisation 


Co-operative 
Society 


A structure designed to facilitate 

grass roots and co-operative 

economic development among 

poor, rural communities 


• Relatively simple to establish 

• Separate legal entity (similar to a company) 

• Allows for business activity and distribution of 
profits to members 


• Must have at least 7 PNG citizens, so may 
not be appropriate for foreign organisation 

• Subject to regulatory requirements and 
supervision by the IPA 

• May not be approved for purposes outside 
government policy 


Incorporated 

Business 

Group 


A legal entity incorporated to 

allow a customary group to 

engage in business and other 

economic activities. 


• Separate legal entity 

• Designed to meet the needs of customary 
groups 


• Limited to members of customary / traditional 
groups 

• Some ongoing regulatory requirements 



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Governance 



This section provides an overview of, and some guidelines for, the effective governance of 
organisations. While the governance objectives and circumstances of each organisation 
are different, there are some key themes of which all organisations should be mindful. 

This section describes governance generally, and so may not cover all specific 
governance matters for all organisational structures. For example, there are greater 
obligations and regulations in respect of the governance of companies than less formal 
structures, and trustees are subject to onerous duties in administering a trust. Neither of 
these are discussed here in any detail. 

Unlike other sections of this handbook, this section does not address specific legal 
requirements for the governance of organisations, but rather provides some practical 
guidelines for managing an organisation. 



"WHAT IS GOVERNANCE? 

Governance refers to the manner in which an organisation is 
run and overseen." 



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© King & Wood IVIallesons 



1 Why is governance 
important? 

Among other things, good governance assists your 
organisation to: 

■ provide better services to the people your 
organisation helps; 

■ build and maintain your organisation's 
reputation; 

■ support your organisation's applications for 
funding; 

■ attract and retain talented people working for 
your organisation; and 



■ identify problems in your organisation early 
and reduce the probability of such problems 
becoming major issues. 

The section below sets out 'best practice' for 
organisations generally. However, your 
organisation's constitution, rules, contracts or 
agreements may set out different or additional 
requirements. 

The formal governance structure of an 
organisation usually consists of three levels - 
shown in the table below. 



Why? Who? When? 










Membership 
assembly 


The most important 

decisions are often made by 

the entire membership of an 

organisation (eg, decisions 

to create or dissolve the 

association or elect the 

Committee of Management) 


Includes all people who are 

members of the 

organisation, regardless of 

whether they take an active 

role in its affairs 


Usually members only 

formally meet occasionally, 

for example at an Annual 

General Meeting (AGM) 


Committee of 
Management 

(sometimes 

called a 

Board of 

Directors) 


The Committee of 

Management is the principal 

governing organ 

The Committee exercises 

ongoing governance 

functions, such as setting 

the policies and strategies of 

the organisation 


Committee is (generally 2 - 

12 members) elected by the 

membership assembly^^ 

The Committee represents 

the interests of the 

organisation's stakeholders. 

The collective leadership of 

the Committee helps an 

organisation stay focused 


Regular, periodic meetings 

take place throughout the 

year (eg monthly) 


Management 


The management team are 

appointed by the Committee 

of Management to execute 

the decisions of the 

Committee (ie fulfil the 

policies/strategies set by the 

Committee) and to manage 

the organisation's activities 


This may consist of senior 

staff, or in smaller 

organisations, one person, 

such as an executive 

director 


Day-to-day 



FIGURE 3: KEY GOVERNANCE BODIES 



Membership 
assembly 



Committee of 

Managment ciiair 



Staff 



Management 
I 



OTHER NAMES FOR THE COMMITTEE OF MANAGEMENT 

A Committee of Management may also be called the 'Board of Directors', 'Board of Governors' or 'Board of 

Trustees (for a Trust). 



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2 What is the Committee of 
Management? 

2.1 What does the Committee do? 

As noted above, the Committee of Management is 
the principal governing body of an organisation. 

A typical approach to their roles is that 
Management (ie senior staff) runs the organisation 
day to day, while the Committee of Management 
sets policy, exercises oversight, and strategically 
guides the organisation. 

As a governing body, the Committee of 
Management: 

■ acquires and protects the organisation's 
assets; and 

■ makes certain the organisation is working to 
fulfil its mission. 

Members of the Committee of Management 
should: 

■ make sure the organisation complies with its 
governing rules and the law; 

■ act in the best interests of the organisation; 
and 

■ exercise care, skill and diligence in acting as a 
member of the Committee of Management. 

2.2 What are the Committee's functions? 

The following functions enable the Committee to 
carry out its responsibilities. 

- Planning: the Committee develops strategies 
to ensure that the mission and purpose of the 
organisation are carried out. Committee of 
Management members approve short and long 
term plans for the organisation. They monitor 
the effectiveness of the organisation's 
programs to see if they have met the goals and 
objectives outlined in the plans. 

- Financial: the Committee approves budgets 
for the organisation, and is responsible for 
procuring adequate resources to enable the 
organisation to fulfil its mission. 

■ Public relations: the Committee seeks 
opportunities to enhance the public image of 
the organisation. 

■ Internal management and organisational 
structure: the Committee is also responsible 



for setting and maintaining a framework of 
delegation and internal control and selecting 
and evaluating the performance of 
Management. 

2.3 Who comprises the Committee? 

The standard composition of a Committee of 
Management is as follows: 

- Chair: usually elected by the Committee for a 
set term. The Chair presides over Committee 
meetings and speaks on behalf of the 
organisation to the public and the media. 

■ Vice-chair: assists the Chair and serves in 
their absence. 

■ Treasurer: provides financial oversight for the 
organisation and advises the board on the 
budget and financial affairs. 

■ General members: the remaining members of 
the Committee. The general members of the 
Committee attend meetings, discuss issues 
and vote at Committee meetings. 

In larger organisations, sub-committees can be 
formed to help manage the work of the Committee. 
Sub-committees usually focus on specific areas or 
particular projects (eg a fundraising committee or a 
finance committee) so that the Committee as a 
whole can concentrate on 'big picture' issues. 

SELECTING COMMITTEE MEMBERS 
When your organisation is choosing its Committee, 
it should consider asking individuals from a range 
of backgrounds (eg academics, practitioners in the 
field in which the organisation operates, individuals 
with experience in the relevant sector, business 
people and community leaders). 

Having a Committee with a diverse range of 
members is generally seen to be positive and a 
sign of a strong organisation. This is because the 
organisation will benefit from having leadership 
from a range of different experiences and views. 

2.4 How are Committee meetings run? 

Committee meetings are where an organisation's 
Committee makes decisions about the business of 
the organisation and discusses and resolves 
issues being faced by the organisation. Meetings 
also ensure that: 

■ Committee of Management members are 
regularly brought together to focus on their 



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roles and responsibilities, identify problems 
and plan for the future; 

■ ideas are shared and discussed and then 
discarded, improved or implemented; 

■ tasks are allocated and reported on; and 

■ regular updates about relevant issues are 
provided. 

An organisation's constitution may contain 
provisions on how often meetings must be held 
and how they must be held (eg if there must be a 
minimum number of committee members present 
ie a quorum). 

The minutes of a Committee meeting record the 
decisions and discussions of the committee at the 
meeting. Maintaining proper records of meetings 
(including agendas and minutes) is important, as it 
allows for decisions made to be reviewed and 
provides a trail showing the steps that the 
organisation has taken in undertaking actions. 
Maintaining meeting minutes is also a legislative 
requirement under certain business structures - eg 
for incorporated associations (see the Organisation 
Structures section). 

The following sets out some considerations 
generally adopted by organisations in conducting 
meetings. The list should be adapted in 
accordance with the rules of the organisation: 

■ Before the meeting 

o Organise the time and place of the 

meeting (including teleconference details if 
necessary). 

o Prepare the agenda for the meeting. 

o Prepare the notice of the meeting setting 
out the meeting details and agenda, and 
circulate to members and any invitees. 

o Circulate to members any materials which 
they are required to review prior to the 
meeting (eg proposals or reports). 

Figure 4 sets out an example of an agenda to 
be distributed before the meeting. 

■ At the meeting 

o Check that there is a quorum present. 

o Open the meeting (the Chair usually does 
this). 

o Conduct the business of the meeting in 
accordance with the agenda (typically, this 



will include accepting the minutes from the 
previous meeting). 

o Record the minutes of the meetings. 

o Agree on the time for the next meeting, if 
appropriate. 

o Once all business before the meeting has 
been dealt with, the chair will close the 
meeting. 

■ After the meeting 

o Finalise the minutes of the meeting and 
prepare for acceptance at the next 
meeting. 

o Ensure that any decisions of the meeting 
are carried out in accordance with the 
wishes of the meeting. 

Figure 5 on the following page sets out an 
example record of the minutes of a Committee 
meeting. 

MEETING TERMINOLOGY 

Some key terms to be familiar with include: "" 

• Agenda: sets out the matters which will be 
covered at a meeting and the running 
order of how matters will be discussed. It 
is circulated to attendees prior to the 
meeting to allow them to prepare, and 
members of the meeting have input into 
the agenda. 

• IVIinutes: records the decisions of the 
meeting and what occurs at the meeting. 
The minutes of a meeting are usually 
accepted (or amended if necessary) at the 
next meeting. 

• Quorum: the minimum number of people 
that must be present at a meeting for the 
meeting to be valid. 

• Resolution or lUlotion: a proposal for 
action voted on by members of the 
meeting. 



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FIGURE 4: EXAMPLE MEETING AGENDA 




1 


Committee of Management Meeting - Agenda 
K Meeting Room 2 
H 1 SeDtember2012. e.OOom to8.3nnm ^^^ 


1 


17.30 


Arrival and refreshments 


18.00 


Opening of meeting and Chair's remarks 


18.15 


Approval of minutes of previous meeting 

[ The previous minutes should be circulated with the agenda.] 


18.20 


Correspondence received and sent 

[Significant correspondence sent or received by the organisation should be reviewed.] 


18.25 


Management report 

[Management may prepare a written report prior to the meeting] 


18.45 


Financial report 

[Management may prepare a written report prior to the meeting, circulated with the 

agenda, and highlight important aspects during the meeting and take questions.] 


19.00 


Committee development report 


19.20 


Strategic plan 

[Approval of strategic objectives for next month/year.] 


19.40 


Other business 

[It is customary to include in an agenda an item for other business to allow Members to 

bring up other general concerns or to update items since the previous meeting.] 


19.50 


Next meeting 

[Chair to announce the date, time and place of the next meeting.] 



FIGURE 5: EXAMPLE MEETING MINUTE? 



leisiiiTiVn. 



Meeting Room 2 
leptember 2012, 6.00pm to 8.3' 



Attendees 



[A list of who attended the meeting to confirm there is a quorum.] 



Apologies 



[A list of who gave notice that they could not attend the meeting.] 



Minutes 



[A summary of each item that was presented at the meeting is included in the minutes.] 

1 Meeting commenced and Chair's remarks 

2 Approval of minutes of previous meeting 

Motion: That the minutes of the Committee of Management Meeting of 1 August 

201 1 be accepted as a true and accurate record of that meeting. 

Moved: [Insert name] 

Seconded: [Insert name] 

Carried unanimously 

[All motions or resolutions should be clearly set out in the meeting so it is clear 

exactly what was accepted by the Committee. They should also include the 

name of the Committee member who proposed the motion and any person who 

'seconded' the motion (ie supported proposing the motion) if required. The 

minutes should clearly specify if the motion was carried (ie agreed).] 

3 Management report 

4 Financial report 

[ The Committee should approve a motion accepting financial reports for the 
previous period. The Committee may need to also review bank statements or 
other financial documents to ensure the financial report is accurate.] 

5 Next meeting 

[ The date, time and place of the next meeting should be listed in the minutes.] 



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2.5 How does the Committee establish 
policies? 

In addition to inolding periodic meetings, tine 
Committee is generally also responsible for 
adopting policies for the organisation. 

Establishing formal written policies and 
implementing them reflects what the organisation 
expects or will not allow. Having written, 



documented policies also helps with the day-to-day 
operation of your organisation because your 
organisation's staff understand what is expected of 
them and how processes should operate in your 
organisation. Examples of typical policies are 
listed in Figure 6. 



FIGURE 6: EXAMPLES OF POLICIES 



Human resources 



Communications 




Finances 



Governance and 
Committee matters 



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3 What is the Management 
Team? 

3.1 What does the Management Team do? 

An important distinction in running an organisation 
is Ihe difference between 'governance' and 
'management'. Generally speaking, the 
Committee of Management is responsible for 
governance (that is, setting the goals and policies 
of the organisation), while the Management Team 
are responsible for management (that is, 
implementing those goals and policies). 

A Committee of Management and an 
organisation's staff should have a good 
relationship as they both must work for the good of 
the organisation. 

3.2 What are the Management Team's 
functions? 

The Management Team is usually responsible for: 

■ providing information to the Committee of 
Management, including recommendations for 
action; 

■ supporting the Committee of Management's 
planning function; 

■ determining community needs; 

■ operating and reporting on programs; 

■ organising the organisation's events and 
fundraising activities once approved by the 
Committee of Management; 

■ managing volunteers and (for senior staff) 
other employees; 

■ implementing Committee of Management 
decisions; 

■ conducting day-to-day financial operations; 
and 

- monitoring and managing daily operations of 
the organisation. 

3.3 Who comprises the Management 
Team? 

The Management Team usually comprises senior 
staff or volunteers (including, in large 
organisations, CEOs and other managers). 



RESOURCES 

Incorporated Associations " "" 

Associations Incorporation Act 1966, Associations 
Incorporation Regulation 1966 

Companies 

Companies Act 1997, Companies Regulation 
1998, Companies Rules 

Trusts 

Trustees and Executors Act 1961 

Cooperative Societies 

Co-operative Societies Act 1982, Co-operative 
Societies Regulation 2003 

Incorporated Business Groups 

Business Groups Incorporation Act 1 974, Business 
Groups Incorporation Regulation 1974 

Other 

Business Names Act 1963, Business Names 
Regulation 1964 

Note: At the time of printing tlie Business Names 
Act is being amended. 



FURTHER INFORMATION 
Our Community is social enterprise which provides 
advice and tools to community organisations in 
Australia. Their website 

(http://ourcommunity.com.au/boards/boards_article 
.jsp?articleld=1453) provides a range of example 
policies which may provide some guidance in 
preparing your organisation's policies. 



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Taxation 



There are several types of tax imposed in PNG. Your organisation should be aware of 
how these taxes operate and whether these taxes may be payable by your organisation. 

This section provides a brief overview of the following types of tax: 

• Income Tax: payable by PNG residents and entities, and also non-PNG residents 
and entities that earn income from sources in PNG;''^ 

• Goods and Services Tax (GST): a tax on the supply of goods and services (and 
the importation of goods); and 

• Business Payments Tax: a tax on certain payments made by businesses to other 
businesses for services provided. 

There are other types of tax that are not covered in this chapter. For example, there are 
other types of taxes that are payable by employers. This is discussed further in the 
Employment section. Unlil<e many other countries, PNG does not impose capital gains 
tax. 

There are also various exemptions available for certain charitable and non-profit 
organisations, and gifts to charitable bodies may be tax deductible for the donor. This 
section gives some information on how your organisation can take advantage of these 
exemptions. 

This section provides general information. It does not take into account the specific 
circumstances of any one organisation. For example, some organisations may be 
governed by specific legislation, which may be relevant to their tax obligations. 
Professional advice should be sought on specific questions of tax and how they apply to 
your organisation. 



Your Organisation 28 

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1 Income tax 

1.1 Overview 

Generally speaking income tax is just as it sounds 
- a tax payable by persons and entities (eg 
organisations) on the income they receive. 

More specifically, income tax is payable by: 

■ PNG residents and entities on income they 
earn anywhere in the world; and 

■ non-PNG residents and entities on income 
they earn from sources in PNG. 

Just because your organisation is not carried on 
for profit, it may still need to pay tax on any annual 
income it receives above K4,000.^^ However, 
certain non-profit organisations, such as those 
established for charitable, religious, educational, 
scientific, literary, musical or athletic pursuits, are 
exempt from income tax.^"* See the table further 
below. 

Incorporated associations and co-operative 
societies (and some unincorporated associations) 
are generally treated like companies for income tax 
purposes. ^^ Accordingly, a reference in this 
section to a 'company' includes an incorporated 
association and a co-operative society. 

1.2 How does your organisation calculate 
its income tax? 

COMPANIES AND INDIVIDUALS 

The amount of income tax that an individual or 
company must pay is calculated by reference to 
the entity's Taxable Income. Taxable Income is an 
entity's Assessable Income less any Deductions. 
The resulting Taxable Income is multiplied by the 
Tax Rate and further reduced by any available 
Credits or Rebates. This is illustrated by the 
following formula: 

TAXABLE INCOME FORMULA 

Income Tax = (Taxable Income x Tax Rate) - 

Any Credits or Rebates 

where: 

• Taxable Income means an entity's 

Assessable Income less any allowable 
Deductions. 



• Assessable Income means an entity's 
Total Income less any Exempt Income. 

• Total Income means the total amount of 
income earned by the entity in the 
particular year. 

• Exempt Income means an entity's income 
that is not taxable (such as certain income 
from exports^® and from the sale of 
existing businesses). ^^ 

• Deductions means expenditure incurred 
in producing assessable income or 
carrying on a business for the purpose of 
producing assessable income. ^^ This is 
explained further below. 

• The Tax Rate is 30% for PNG companies 
and varies for individuals depending on 
the amount of income they earn each 
year. 

Allowable deductions for your organisation might 
include the costs its pays for rent, employees' 
salary or wages, telephone use and stationery, and 
could also include expenses incurred in 
fundraising. 

Deductions that may be allowable include 
expenditure in relation to: 

■ trading stock;^^ 

■ gifts to charitable bodies with tax-deductible 
status if greater than K50;®° 

■ the preparation by a registered tax agent of a 
return or other information required to be 
disclosed to the IRC;^^ 

■ expenses incurred in the preparation, 
registration and stamping of a lease of 
property to be used to produce assessable 
income (this might be legal costs incurred in 
drafting or reviewing the lease and any 
registration or stamping costs);®^ 

■ repairs to premises, plant, machinery, 
implements, utensils, rolling stock or articles 
used for the purpose of producing assessable 

83 

income; 

■ borrowing expenses (commonly, a loan 
establishment fee charged by the bank and 
any interest repayments), where the 



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borrowings are used for the purpose of 
producing assessable income;®"^ and 

■ bad debts tinat are written off in tine year of 
income and have been brought to account as 
assessable income of any year, or are in 
respect of money lent in the ordinary course of 
the taxpayer's business.®^ 

Deductions may also be made for the depreciation 
of certain assets (the value by which assets 
decrease each year) and certain 'tax losses' of 
previous years (broadly, where the taxpayer is left 
with unused allowable deductions for a year).®® 

However, deductions are generally not allowed for 
the costs of forming or establishing your 
organisation. For example, no deduction will be 
available for the cost of buying a building, plant or 
machinery or other long-term assets. Deductions 
are also not allowed for private or domestic 
expenditure or for capital improvements, or 
expenditure incurred in gaining or producing 
exempt income. A professional advisor can assist 
your organisation in determining what deductions 
your organisation is entitled to. 

TAX DEDUCTIBLE STATUS 
Gifts of K50 or more (or some property worth K50 
or more®^) to a charitable body approved by the 
Commissioner are tax deductible for the donor. 
This means the donor's Taxable Income is 
reduced by the amount of the donation. 

Having tax deductible status can be of great 
assistance to organisations when fundraising 
because it gives donors a tax incentive to make 
donations. It is generally more attractive (and tax 
effective) for a donor to donate money to a 'tax 
deductible entity' than another entity. Check with 
the IRC for further information on obtaining tax 
deductible status. 



TRUSTS 

Trustees are taxed on the 'net income' of the trust 
estate, which is the Assessable Income of the trust 
minus any allowable deductions. Trusts are 
generally taxed at the rate of 28% (as at the date 
of publication). 

When the trustee distributes after-tax income to 
the beneficiaries of the trust, the beneficiaries are 
generally not entitled to a credit for the tax paid by 



the trustee. The distribution will be Assessable 
Income to the beneficiaries. 

Trustees must withhold 10% of distributions made 
to non-resident beneficiaries and remit that amount 
to the IRC.®^ This tax is additional to other income 
tax payable by non-resident beneficiaries. 

PARTNERSHIPS 

Partnerships must complete tax returns setting out 
the income of the partnership, but are not liable to 
tax on that income.^" Rather, the partners include 
in their assessable income their individual interests 
in the 'net income' of the partnership, and can seek 
deductions for their interest in a 'partnership 
loss' 



91 



The 'net income' of a partnership is its Assessable 
Income minus allowable deductions, calculated as 
if the partnership were a taxpayer, but excluding 
deductions relating to tax losses of previous years. 

The 'partnership loss' is the amount by which 
allowable deductions exceed the Assessable 
Income of the partnership, calculated as if the 
partnership were a taxpayer, but excluding 
deductions relating to tax losses of previous 
years 



92 



1.3 How does your organisation pay its 
income tax? 

The tax year runs from 1 January to 31 December, 
so income tax is assessed on the income earned 
during each calendar year.^^ 

PROVISIONAL TAX 

Income tax is collected under a 'provisional tax' 
system. This means that taxpayers pay tax on 
income during the same year that the income is 
earned, rather than in the subsequent year (for 
example, income tax payments made in 2009 are 
for income earned in 2009) 



94 



Because tax is levied before the year is completed, 
the Commissioner makes an assessment of what a 
taxpayer's total tax payable is likely to be based on 
previous years (or if no tax return was lodged, the 
Commissioner can estimate the amount of tax 
payable).^' 

Provisional tax is payable by companies in three 
instalments on 30 April, 31 July and 31 October 



96 



If a taxpayer believes that its income for a year wil 
be different to that in the previous year, then they 
may apply to the Commissioner to reduce the 



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provisional tax payable.^'' Tinis generally needs to 
be done prior to the third payment. Penalties apply 
if the taxpayer underestimates their income by too 
much 



98 



Where there is any difference between the tax 
which has been paid during the year and the tax 
that should actually be paid, this is rectified 
through a 'tax return' that is lodged after the end of 
the year. 

EXAMPLE PROVISIONAL TAX ASSESSMENT 
An example of a provisional tax payment is as 
follows. 

• During 201 0, Company X will make 
payments for income tax for 201 on 30 
April, 31 July and 31 October 2010. The 
amount payable will be calculated using 
the tax return lodged by Company X in 
2009. 

• After 31 December 201 0, Company X will 
lodge a tax return for 201 0. If the IRC's 
assessment of the tax payable by 
Company X for 201 is different to the 
amount of tax that Company X has already 
paid in provisional tax throughout the year. 
Company X will pay, or receive a 
credit/refund for, the difference. 



TAX RETURNS 

Returns must be lodged by: 

■ any individual whose gross non-salary income 
exceeds (or who carries on a business which 
earns more than) K100; and 



100 



Tax returns must be lodged within two months of 
the end of the tax year (that is, by 28 February of 
the year after the tax year). If your organisation 
has a registered tax agent who prepares your tax 
return then the return may be lodged later than 
this. Penalties apply for failure to lodge a return 
The relevant forms required are available from the 
IRC. 

After your organisation lodges its tax return, the 
IRC will then issue an assessment within five to six 
months and, if necessary, any further tax payable 
is paid after that in accordance with the 
assessment. ^°^ If the assessment indicates that 
the taxpayer has paid too much tax, a refund will 
be available for the amount of the overpayment. 



102 



A taxpayer dissatisfied with an assessment may 
object within 60 days after service of the notice of 
assessment. ^°^ If the IRC disallows the objection, 
the taxpayer may appeal to the Review Tribunal or 
the National Court within 60 days of receiving 
notice of the IRC's decision.^"'* While an appeal is 
pending, tax must still be paid by the taxpayer in 
accordance with the assessment. ^°^ If the appeal 
alters the assessment, tax will be refunded. 



106 



all other entities 



99 



1.4 How can your organisation take 
advantage of income tax exemptions? 

Your organisation should consider whether money 
it receives is Taxable Income and, if so, whether 
an exemption from income tax may apply. 

Some key exemptions that your organisation may 
be eligible for are described in Figure 7 on the 
following page. There are usually requirements 
that need to be satisfied to obtain the benefit of 
these exemptions. If your organisation wishes to 
take advantage of an exemption listed below, 
specific taxation advice should be sought. 



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FIGURE 7: INCOME TAX EXEMPTIONS 







Total exemption 
for religious, 
scientific or 

public 
educational 

institutions, and 
hospitals"" 


The income of the following institutions is exempt from income tax: 
religious institutions; 
scientific institutions; 
public educational institutions; 
public hospitals; and 

hospitals carried on by a society or association otherwise than for the purposes of 
profit or gain to the individual members of that society or association. 


Temporary total 

exemption for 

approved 

charitable 

trusts'"' 


The income of a trust, which is: 

established for 'charitable purposes' (meaning the relief of the poor, education and 

medical relief or any other object of general public utility not involving an activity for 

profit); and 

approved by the Commissioner, 
is exempt from income tax for five years (which may be extended). 

An institution or body may be approved by the Commissioner if: 

■ there is an executed and irrevocable trust deed; 

■ the trustee of the trust and the person who establishes the trust do not benefit from 
the trust's activities; 

at least 80% of the trust income is used for the purpose for which the trust was 
established; and 

■ the trust maintains proper accounts. 


Total exemption 

for non-profit 

bodies'"' 


The income of a society, association or club that is not carried on for profit and is 
established for: 

■ the encouragement of music, art, science or literature; 

■ the promotion of sport or athletic games; or 

promoting the development of aviation or the agricultural, pastoral, horticultural, 
viticultural, manufacturing, human or industrial resources of PNG, 
is exempt from income tax. 


Limited 
exemption for 

non-profit 
organisations"" 


An incorporated organisation that: 

is not carried on for the purposes of profit or gain to its individual members; and 
is (by its rules or other document creating the company or governing its activities) 
prohibited from distributing profits to its members, 

is entitled to the following tax benefits: 

an exemption from income tax on annual income up to K4,000; and 
a 50% discount on annual income between K4,000 and K6,000. 


Temporary 

exemption under 

the Rural 

Development 

Incentive'" 


The income of a business activity not carried on before 1 January 1988 which is: 
■ carried on in a designated rural development area; and 

engaged in a specified industry, 
is exempt from income tax for 10 years from the date the industry commences."^ 


Peace Corps 
volunteers"^ 


Officers of the Peace Corps or US citizens employed by the Peace Corps who are 
temporarily in PNG to render services under the Peace Corps Understanding are 
exempt from income tax. 



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To take advantage of these exemptions your 
organisation may need to ensure one or more of 
the following. 

Prohibition on distributions to members 

To be a 'non-profit' entity, your organisation may 
need to have a clause in its constitution or 
governing rules prohibiting the distribution of the 
organisation's money or property to its members. 

The appropriate drafting of the clause will depend 
on the organisation, its constitution and the 
exemption sought to be relied upon. However the 
following is an example: 

'No part of the profits (if any), income or 
property of [ttie Organisation] may be paid or 
transferred to a member, eitfier directly or 
indirectly by way of dividend, bonus or 
otherwise.' 

Your organisation should also consider whether it 
is appropriate to exclude from the above 
prohibition to allow for payments which might be 
made to some members in certain circumstances. 
For example, payments made in good faith to a 
member for: 

- remuneration for services provided by that 
member to the organisation; 

■ goods supplied in the ordinary course of 
business; or 

■ reasonable rent for premises let by a member. 

These carve-outs may not be appropriate in all 
circumstances and all exemptions. If in doubt, 
legal advice should be sought to ensure that your 
organisation will be eligible to rely on the relevant 
exemption. 

Winding up 

Another clause that may be required to show that 
your organisation is not for profit is a similar 
restriction on distributing property to members on 
the winding up of the organisation. 

An example clause might state that if any property 
remains after the winding up or dissolution of the 
organisation or trust, the property must not be 
distributed to members. Typically the property is 
required to be transferred to another institution or 
organisation which: 

■ has objects and/or purposes similar to those of 
the organisation; and 



■ has a similar prohibition in its constitution or 
governing rules on the distribution of its 
income and property among its members, and 
the prohibition is to an extent at least as great 
as imposed on the organisation under its 
constitution. 

The constitution should specify when and how 
such an institution is to be determined. 

Your organisation may instead want to specifically 
name the institution(s) to whom the property will be 
transferred. However care should be taken to 
ensure that such institution(s) are non-profit and 
the constitution should also address the situation 
where the institution(s) no longer exist or refuse to 
accept the property. 

Other requirements could be included, for 
example, requiring it to be an institution which is a 
deductible gift recipient. 

Purpose of the organisation 

The non-profit, charitable trust and 
religious/educational/hospital exemptions require 
that the organisation or trust is established for a 
certain specified purpose(s). To give effect to this, 
a trust deed or constitution will often include a 
'purpose clause', which sets out the (charitable) 
purposes which the organisation may pursue. 

This is sometimes accompanied by another clause 
which restricts the use of the income and property 
of the organisation to the promotion of those 
purposes. 

When drafting the purpose clause, your 
organisation may wish to also include the ability to 
do anything reasonably incidental to the listed 
purpose(s). This might give your organisation 
some flexibility as its operations development 
whilst still working for its charitable purposes, but 
your organisation should confirm that the IRC will 
not then treat your organisation as not being for a 
charitable purpose. 



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2 Goods and services tax 
(GST) 

2.1 Overview 

GST is a tax added to the supply of goods and 
services (it replaced the previous Value Added Tax 
or 'VAT' in 2004). 

It is collected by registered businesses from their 
customers and paid to the IRC monthly.""^ It is 
applied at a flat rate of 1 0% to most goods and 
services, subject to exemptions (see below). ^^^ All 
taxable goods and services sold by a registered 
business must have GST included in the final 
price. Businesses that are not registered do not 
include GST in goods and services they sell and 
do not need to account to the IRC each month. 

This section focuses on the supply of goods and 
services within PNG. The importation of goods is 
also generally subject to GST. 

GST is not a tax on profits. Registered 
organisations can claim back GST they pay on 
goods and services for use in their business 



116 



2.2 How does your organisation register 
for GST? 

DOES YOUR ORGANISATION NEED TO REGISTER? 

All entities with an annual turnover of more than 
K1 00,000 are required to register for GST with the 
IRC. The turnover must be from a 'business 
activity' (including selling goods or services for a 
fee) but it does not necessarily need to be for 
profit. Entities with a turnover of less than 
K1 00,000 may register on a voluntary basis. ^^^ If 
your organisation does not need to register and 
chooses not to register, then it does not need to 
charge GST or include GST in any sales it makes. 

Penalties apply for failing to register when 
required. ^^^ 

ESTIMATING ANNUAL TURNOVER 
If your organisation does not know its turnover on 
an annual basis, an approximate indicator of when 
your organisation needs to register for GST is: 

weekly turnover of K1 ,900, or 

monthly turnover of K8,000. 



WHAT IS THE PROCESS FOR REGISTRATION? 

The forms for registering for GST are available 
from the IRC free of charge (or from their website 
www.irc.gov.pg/tax_forms.html). 

WHAT ARE THE CONSEQUENCES OF 
REGISTRATION? 

Once registered for GST, an entity: 

- must include GST in the price of goods and 
services it sells; 

■ can claim input credits for GST it pays on 
expenses; and 

■ must lodge GST returns each month. 

An entity which is not registered cannot charge its 
customers GST for the goods and services it sells, 
and does not have to account to the IRC each 
month for GST. However, unregistered 
businesses cannot claim input credits for the GST 
they pay on purchases. 

2.3 How does your organisation pay its 
GST? 

A registered entity must complete and lodge a 
GST return for each month by the 21 st day of the 
following month. "^ Generally, registered entities 
will need to pay GST to the IRC, however if 
expenses are greater than sales for a month then 
a registered business will be entitled to a GST 
refund from the IRC 



120 



HOW IS GST CALCULATED? 

Broadly, the charging and paying of GST works in 
the following manner: 

■ Registered entities pay a 1 0% tax on goods 
and services they acquire ('inputs'). 

■ Registered entities are obliged to charge a 
1 0% tax on the sale of taxable goods and 
services, which they collect from their 



customers ('outputs') 



121 



At the end of each month, a registered 
business must calculate how much GST it has 
paid in that month to its suppliers and how 
much GST it has collected from its customers 
(ie, the difference between GST on outputs 
and GST on inputs). The difference is paid to 
IRC each month. 



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CALCULATING GST 

An easy way to calculate how much GST your 
organisation has paid or collected is to divide the 
total sales or expenses by 11 . For example, if total 
sales with GST for a month are K297,000 including 
GST, then the GST collected is K27,000 (being 
297,000 divided by 1 1 ). This assumes all sales 
and expenses include GST. 

Many types of expenses do not include GST (for 
example, salary and wages, overseas travel and 
purchases from a supplier who is not registered for 
GST), and therefore GST on inputs cannot be 
claimed for these expenses. 

EXAMPLE OF GST CALCULATIONS 

An example of GST calculations is as follows. 

In January, an organisation buys the following 
materials: 

Wood: K1 1 ,000 (including K1 ,000 GST) 

Nails: K1 10 (including K10 GST) 

Foam: K5,500 (including K500 GST) 

Total: K1 6,61 (including K1 ,51 GST) 

The organisation sells a number of beds for 
January, with the following total sales: 

Sales: K55,000 (including K5,000 GST) 

The amount of GST payable to the IRC for January 
is calculated as follows: 

GST on Sales: K5,000 

less GST on Expenses: K1 ,51 

Total GST payable: K3,490 

REPORTING AND PAYING GST 

Registered entities must return GST to the IRC on 
an 'Invoice Basis'. ^^^ This means that GST must 
be returned in the month that the tax invoice was 
issued (or if payment is received first, then the 
month the payment is received). ^^^ Therefore, if 
your organisation issues a tax invoice in March but 
it is not paid until June, it must account for the GST 
for that supply in March. 

However, entities with an annual turnover of less 
than K500,000 and 'non-profit bodies' (see section 
2.4) may apply to the IRC to return GST on a 
'Payment Basis'. ^^'^ This means that the entity will 
account for GST only when it receives payment for 
the goods sold, and claim GST on purchases in 



the period in which they paid for them^^^ 
Therefore, if your organisation issues a tax invoice 
in March but it is not paid until June, your 
organisation can account for the GST for that 
supply in June. 

RECORD KEEPING 

If your organisation is registered for GST, then it is 
vital that your organisation keeps proper records of 
the sales and expenses incurred each month, 
including any sales and purchases that did not 
include GST. 

A 'non-profit body' (see the definition box below) 
that carries on its operations as separate branches 
or divisions can apply to the IRC for the different 
branches of the body to be treated as separate 
entities for the purposes of GST. Each branch or 
division should maintain an independent system of 
accounting and be separately identified by 
reference to the nature of the activities carried on 
or the location of that branch or division 



126 



TAX INVOICES 

If requested by a recipient, registered entities must 
issue tax invoices for the goods and services 
which they supply which include GST (unless the 
amount is less than 50K). 

A tax invoice should include the following:^^^ 

■ the words 'tax invoice' in a prominent place 
and the date of the tax invoice; 

■ the name, address and registration number of 
the supplier; 

■ the name and address of the recipient; 

■ a description of the goods and services; 

■ the quantity or volume of the goods and 
services supplied; and 

■ either: 

o the total amount of the tax charged, the 
amount payable, excluding tax, and the 
consideration, inclusive of tax for the 
supply; or 

o where the amount of tax charged is the tax 
fraction of the consideration, the 
consideration for the supply and a 
statement that it includes a charge in 
respect of the tax. 

An example tax invoice is set out in Figure 8 on the 
following page. 



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FIGURE 8: EXAMPLE TAX INVOICE 



TAX INVOICE 

ABC Inc, Registered Number 123 456 789 
123 ABC Street, Port Moresby 

Date: 






Recipient: 




Address: 










Goods/Services Supplied 


Quantity/ 
Volume 


Amount 
payable 


GST 


Total incl 
GST 







































CONTRACTS AND GST 

Whenever your organisation enters into a contract 
under whicin payments must be made, tine contract 
sinould expressly state whether the amounts in the 
contract include or exclude GST. Additionally, 
your organisation may wish to state when GST is 
payable (for example, that the principal amount 
itself is payable immediately, but the GST is only 
payable once the supplier gives the recipient a tax 
invoice). See the Contracts section for further 
information on contracts. 

2.4 How can your organisation take 
advantage of GST exemptions? 

Certain transactions do not attract GST. Examples 
which may be relevant to organisations include: 

■ supply of goods or services to prescribed 
foreign aid providers (generally, these are UN 
agencies and governmental aid bodies);^^® 

■ supply of medical and related services by a 
hospital, a registered medical practitioner, 
registered dental practitioner, optician or 



■ supply of educational services by an 
educational institution;^^^ and 

■ supply of goods and services to a 'non-profit 
body' (see definition box below), being a: 

o religious organisation; 

o charity organisation; or 

o community organisation, 

in each case carrying on charitable activities 
and approved by the Commissioner. ^^^ 

WHAT IS A NON-PROFIT BODY? 
A 'non-profit body' for GST purposes is a society, 
association, or organisation, whether incorporated 
or not, that is 

• not carried on for profit or gain for its 
owners, members or shareholders; and 

• by the terms of its constitution, rules, or 
similar governing document, prohibited 
from distributing profits to its proprietors. 



members or shareholders 



133 



nurse, or an aid post orderly; 



129 



supply of housing or a car to an employee by 
their employer in the course of employment; 



130 



While a supply to a non-profit body will not include 
GST, services or goods sold by such an 
organisation may attract GST. 



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3 Business payments tax 

3.1 Overview 

Business Payments Tax is a tax deducted from 
certain payments made by businesses to otiner 
businesses or contractors. Tine Business 
Payments Tax rate is 10% of tine value of the 
payment. ^^"^ Most importantly, Business Payments 
Tax does not need to be deducted for payments to 
a business that holds a certificate of compliance. 

The business making the payment (the payer) 
must account to the IRC on the 14th day of each 
month for any amounts deducted 



135 



Penalties apply for organisations that fail to deduct 
the tax when required 



136 



3.2 How does your organisation pay its 
Business Payments Tax? 

Business Payments Tax must be withheld and 
accounted to the IRC for payments made by a 
company, business group, institution or other body 
to a business or contractor for the following types 
of services:^^^ 

■ building and construction services, including 
repairs, painting and fitting of built-in furniture, 
and provision of engineering, architectural or 
surveying services; 

■ professional services, including services as an 
advisor, manager or consultant; 

■ road transport of any goods or materials, and 
repair or maintenance of any motor vehicle or 
component; 

■ cleaning services; 

■ advertising and sign-writing services; 

■ security services; and 

■ entertainment of any kind. 



However, there are exclusions including 



,138 



• payments to a person holding a valid 
Certificate of Compliance;^^^ 

• payments of a private or domestic nature, 
where the payer is an individual; 

• payments of exempt income or a payment 
to an exempt person or business; and 

• payments of salary or wages. 

A business will only be issued with a Certificate of 
Compliance if the IRC is satisfied that the business 



maintains appropriate records, transacts business 
through a bank account and complies with its 
taxation obligations.^'*" 

3.3 IHow does your organisation register 
for and pay its Business Payments Tax? 

An entity that makes taxable payments must 
register as a payer with the IRC and fulfil certain 
reporting requirements.^"*^ This is done using IRC 
Form P2. 

Registration need only be done once and will stay 
current until the IRC is notified that the 
organisation is no longer in business or does not 
anticipate ever again making any more taxable 
payments. ^''^ 

Once registered, the IRC will provide a Paying 
Authority Registration Number to the 
organisation.*"*^ 

Form P5 must be filed with the IRC, along with tax 
deducted for the relevant month, by the 14th of the 
following month. ^'*'* 

At the end of the year, a registered entity must 
lodge Form P7 (Income Tax Deduction Certificate) 
and Form P8 (Business Tax Reconciliation 
Statement) 



145 



4 Other types of tax 

Your organisation should be aware that other types 
of tax may be payable in certain circumstances. 

These taxes include the following. 

■ Training Levy: this is payable by every 
employer who has a total payroll of K200,000 
or more. The levy is assessed annually and is 
calculated at 2% of the payroll. The amount of 
levy payable can be reduced by certain 
expenses incurred in training PNG 
employees.^^^ 

■ Stamp Duty: this is payable on the transfer, 
agreement for sale, declaration of trust over, or 
grant of certain rights or property (particularly 
land). Stamp duty is also payable on leases. 
Some cooperative societies may qualify for an 
exemption from stamp duty.^"*^ 

Customs/Import/Export Duties: there are a 
number of other taxes which are payable on 
the import and/or export of certain goods. 
Some exemptions may apply. Customs laws 



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are administered by tine Customs Services 
Commission.^"*® 

Withholding Tax: tinere are various 
witininolding taxes in PNG, winicin apply to 
certain payments of money. Tine taxes require 
tine person or entity making tine payment to 
witlnhold tax on tine payment and pay tine tax to 
tine IRC. Such payments include dividends 
paid by companies, interest payments and 
certain payments overseas 



149 



Land Tax: this imposed by several provincial 
governments on the sale and purchase of land. 
This is not a tax levied by the National 
Government (the IRC), and varies depending 
on each province. 

Overseas Insurers Tax: this is payable by 
PNG businesses who are insured with non- 
resident insurers. The tax is payable on 
premiums paid to the insurer. ^^° 



RESOURCES 

Income Tax "^^ 

Income Tax Act 1959, Income Tax Regulation 
1959 

See also Income Tax (International Agreements) 
Act 1987, Income Tax (New Fiscal Year- 
Transitional Provisions) Act 1977, Income Tax 
(Rates) Act 1975, Income Tax (Rates) Act 1976; 
Income Tax (Salary or Wages Tax) (Rates) Act 
1979, Income Tax (Specific Gains Tax) (Rates) Act 
1982, Income Tax, Dividend (Withholding) Tax and 
Interest (Withholding) Tax Rates Act 1984. 

GST 

Goods and Services Tax Act 2003, Goods and 
Services Tax Regulation 2005 

Other 

Customs Tariff Act 1990, Stamp Duties Act 1952, 
Stamp Duties Regulation 1953 



FURTHER INFORMATION 
Income tax, GST and business payments tax (and 
most other taxes levied by the National 
Government, such as stamp duty) are 
administered by the Internal Revenue 
Commission. The IRC can provide further 
information on the taxation obligations of your 
organisation. 

Tax issues are technical and often specific to the 
circumstances of your organisation. If your 
organisation has questions relating to taxation, 
your organisation should seek professional tax 
advice from an accountant or tax lawyer. 



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FACT SHEET: TAKING ADVANTAGE OF INCOME TAX EXEMPTIONS 

The following table sets out several of the key income tax exemptions which may be available for community 

organisations. 













Exemption 


1 


1 


ligibility 


1 


Total exemption for 
religious, scientific 
or public educational 
institutions and 
hospitals'^' 


Entity must be a religious, scientific, public educational institutions or a public 
hospital. A private hospital is included if it is carried on by a not-for-profit society 
or association. 


Five year total 
exemption for 
approved charitable 
trusts'" 


The trust must be established for 'charitable purposes' (meaning the relief of the 
poor, education and medical relief or any other object of general public utility not 
involving an activity for profit) and approved by the Commissioner. An institution 
or body may be approved by the Commissioner if: 

• there is an executed and irrevocable trust deed; 

• the trustee of the trust and the person who establishes the trust do not 
benefit from the trust's activities and at least 80% of the trust income is 
used for the purpose for which the trust was established; and 

• the trust maintains proper accounts. 


Total exemption for 
non-profit bodies'^^ 


The society, association or club must not be carried on for profit and must be 
established for the encouragement of music, art, science or literature, sport, or 
the development of aviation or the agricultural, pastoral, horticultural, viticultural, 
manufacturing, human or industrial resources of PNG. 


Limited exemption 
for non-profit 
organisations'^" 


Incorporated organisation must nof be carried on for the purposes of profit or 
gain to its individual members and be (by its rules or other document creating the 
company or governing its activities) prohibited from distributing profits to its 
members. Tax benefits include: 

• an exemption from income tax on annual income up to K4,000; and 

• a 50% discount on annual income between K4,000 and K6,000. 



Various changes to your organisation's constitution, rules or governing document may be required to ensure 
your organisation meets the requirements for these tax exemptions. See the 'Business Structures' and 
'Governance' section of this handbook for more information on how to change your organisation's 
constitution or rules. 

PROHIBITION ON DISTRIBUTIONS TO MEMBERS 

For your organisation to be not-for-profit, it must have a clause in its constitution or governing rules 
prohibiting the distribution of the organisation's money or property to its members. 

The appropriate drafting of the clause will depend on the organisation (and exclusions may be appropriate - 
for example, to allow your organisation to pay for services provided by a person to the organisation). The 
following is an example: 

'No part of the profits (if any), income or property of [ttie Organisation] may be paid or transferred to a 
member, eitfier directly or indirectly by way of dividend, bonus or otherwise.' 

WINDING UP 

A similar restriction on distributing property to members on the winding up of the organisation may also be 
required to ensure your organisation is treated as not-for-profit. The clause might state that after winding up 
or dissolving the organisation or trust, the property must not be distributed to members. 



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Typically the property is required to be transferred to another institution or organisation with similar objects 
and which has a similar or stricter prohibition on distributing income and property to its members. The 
constitution should specify when and how such an institution is to be determined. 

Your organisation may instead want to specifically name the institution(s) to whom the property will be 
transferred. However care should be taken to ensure that such institution(s) are non-profit and the 
constitution should also address the situation where the institution(s) no longer exist or refuse to accept the 
property. 

Other requirements could be included, for example requiring it to be an institution which is a deductible gift 
recipient. 

PURPOSE OF THE ORGANISATION 

Some exemptions require that the organisation is established for a certain specified purpose. To give effect 
to this, a trust deed or constitution will often include a 'purpose clause', which sets out the (charitable) 
purposes which the organisation may pursue. This is sometimes accompanied by another clause which 
restricts the use of the income and property of the organisation to the promotion of those purposes. 

When drafting the purpose clause, your organisation may wish to also include the ability to do anything 
reasonably incidental to the listed purpose(s). This might give your organisation some flexibility as its 
operations development whilst still working for its charitable purposes, but your organisation should confirm 
with the IRC that this will not affect your organisation's status as being for charitable purposes. 




©Josh Estey/CARE 



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Managing risk 



Risk is an unavoidable part of running an organisation. However, not managing risk 
effectively can have negative consequences on your organisation's reputation and expose 
your organisation to unnecessary legal risks. 

This section aims to help your organisation: 

• identify the particular risks that could arise in carrying out its operations; 

• eliminate or minimise the risks; and 

• minimise the consequences if those risks do occur. 

The second part of this section discusses how your organisation can help to protect itself 
against the negative consequences of some risks by taking out an insurance policy. 



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1 Risk management 

1.1 Why manage risk? 

When setting up and operating an organisation it is 
important to consider the following questions: 

■ What things could go wrong during your 
organisation's operations or activities? What 
are the major risks your organisation faces? 

■ What can your organisation do to reduce the 
risk of these things happening? 

■ What can your organisation do to reduce the 
consequences if these things do happen? 

This will help your organisation to identify: 

- whether your organisation has the resources, 
practices and procedures to manage each risk; 

■ what policies and procedures your 
organisation should have in place to manage 
the risk; 

■ what training or education your organisation's 
staff and volunteers will need to safely carry 
out their duties and manage risks that occur in 
the course of their work; and 

- what insurance policies may be appropriate for 
your organisation. 

THE DUTY OF CARE 

When identifying risks to people, your organisation 
should be aware that your organisation has a legal 
duty to care (meaning to accept responsibility for 
the safety) for people. 

This includes your organisation's workers and 
anyone using your organisation's premises, ^^^ 
goods or services. Your organisation may also 
owe a duty of care to other people depending on 
the circumstances. It is important that your 
organisation identifies the persons to whom it may 
owe a duty of care, to ensure it is not negligent in 
meeting the required standard of care. 

1.2 What types of risks might your 
organisation face? 

The risks your organisation will need to manage 
depend on its activities, operations and the 
particular services or products it offers. The 
following list of common risks faced by 
organisations provides some examples of the 
types of risks your organisation may face. 



However, your organisation will have risks that are 
particular to its own circumstances: 



Risks to property 



Your organisation is robbed and important 
equipment and supplies are taken. 

There is a cyclone, flood or fire which 
destroys the building and your organisation's 
records are lost. 

The computer equipment fails or a virus 
causes your organisation to lose all its 
documents and data. 



Risks to people 



A person (for example, a volunteer, 
employee or a visitor) is injured in your 
organisation's buildings or when performing 
duties for your organisation. 

An employee or volunteer has a car accident 
while visiting a client or driving to work. 

An employee is inadequately trained or 
supervised, and causes injury to another 
employee. 



Risks to operations and activities 



Someone involved in your organisation 
commits fraud, causing loss to your 
organisation. 

A supplier fails to supply goods or services 
that are essential to your organisation's 
operations. 

Your organisation has poor record keeping 
practices and fails to report to donors a 
required, so your organisation stops 
receiving funding. 

Goods that your organisation sells or 
distributes are defective and cause injury or 
illness to people who use them. 



Other risks 



An employee commits fraud or other illegal 
conduct and the reputation of your 
organisation suffers as a result. 

New laws or regulations make it more difficult 
or expensive for your organisation to carry 
out its activities. 

Your organisation's bank becomes insolvent 
and your organisation is unable to withdraw 
its funds. 



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THE STANDARD OF CARE REQUIRED 
To ensure your organisation provides tine minimum 
standard of care, it must address any 'foreseeable 
risks' that might affect the health and safety of a 
person to whom it owes a duty of care. 

A foreseeable risk is any risk that a reasonable 
person would consider is a real risk, based on the 
available information and what they knew at the 
time. It could be a risk of physical harm, 
psychological harm or economic loss of a person. 

In thinking about which risks are foreseeable, your 
organisation should take into account the different 
types of people who your organisation owes a duty 
to. For example, children may be less careful than 
adults. Specialists (eg electricians) can be 
expected to understand the risks associated with 
their job. 

Your organisation should also take into account 
risks arising from the actions of its employees 
while they are carrying out the work or tasks they 
were employed to do - include risks that your 
organisation's workers might be negligent or fail to 
obey instructions. 

1.3 How can your organisation manage 
risk? 

There are several measures that your organisation 
can take to reduce both the risk of things going 
wrong and the impact on your organisation's 
operations if an adverse event does occur. 
Protecting your organisation against certain risks 
can be as simple as having a procedure in place 
which explains to staff and volunteers how to 
perform their tasks safely. One key method of 
addressing risk is to take out insurance (this is 
discussed in the second part of this section). The 
following additional risk management actions will 
be addressed more fully below: 

■ creating a safe working environment; 

■ financial security; 

■ protecting your property (buildings, equipment 
and vehicles); and 

■ other risk management tools. 

For each risk identified, it is important that your 
organisation considers the range of different 



procedures that could protect against the risk or its 
consequences. Your organisation should then 
balance the cost of introducing the procedure 
against the effectiveness of the procedure, to 
identify the most suitable procedure (or collection 
of procedures) to adopt. 

ACTION REQUIRED TO MANAGE RISKS 
If your organisation owes a duty of care to a 
person, your organisation needs to take all 
reasonable action to reduce any foreseeable risks. 
This includes making sure your organisation's 
people also take reasonable care when performing 
their work - as your organisation may be 
responsible for their actions. 

What is reasonable for an organisation to do to 
manage risks will depend on: 

the size of the organisation; 

the resources available to the organisation 
(people, expertise, money, equipment etc); 

the type of risks associated with the 
organisation's business; 

how serious the risks are (consider what is 
the worst consequence if the risk occurs); 

how likely it is that the risk will occur; and 

the cost of eliminating or reducing the risk. 

For example, all organisations will generally be 
expected to take steps to avoid or reduce a risk 
that is very likely to occur or could result in serious 
injury or loss, but is easy or cheap to avoid. An 
organisation is less likely to be expected to take 
very expensive steps that lead only to a small 
reduction in risk. 



CREATING A SAFE WORKING ENVIRONMENT 

As an employer, your organisation has a duty of 
care to provide a safe working environment for its 
employees, volunteers, contractors and other 
visitors to its premises (see the Employment 
section and the information boxes in this section 
for further information on this topic). 

The risk management measures set out in the 
table on the following page may help your 
organisation to fulfil its duty of care. 



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Safe 
premises 


Make sure your organisation's 
premises are safe by regularly 
inspecting its land and buildings for 
any hazards which may cause risks 
to staff, volunteers, clients and 
members of the public. Your 
organisation's buildings should be 
in a good state of repair, with: 

any equipment or vehicles 
stored in appropriate places; 

no obstacles (or well 
signposted if they cannot be 
removed); and 

■ clear access ways (doors, 
windows, paths and stairs). 

If there are dangers that cannot be 
totally mitigated, your organisation 
should ensure that prominent signs 
are in place to warn of the relevant 
danger. 


Emergency 
procedure 


Have an evacuation procedure in 
place which all staff and volunteers 
are familiar with. The policy should 
set out how instructions will be 
given in case of an emergency, 
how staff should exit the premises 
and designate a safe place where 
everyone will meet. Your 
organisation should practice its 
emergency procedure several 
times each year. 


IVIachinery 
and 

equipment 
safety 


Any machinery and equipment 
used by your organisation should 
be well maintained and regularly 
tested. It is a good idea to keep 
records of servicing and testing of 
equipment. Your organisation 
should also keep a record of who 
has the training or expertise to 
operate each piece of equipment 
and never let an unqualified person 
use the equipment. Your 
organisation may need to restrict 
public access to equipment and 
machinery. 


Vehicle 
safety 


Vehicles used by your organisation 
should be well maintained and 
regularly serviced. Drivers must 
hold a current license and tell your 
organisation if any of their licence 
conditions change. A policy on use 
of the organisation's vehicle may 
assist with vehicle safety. 



Fire safety 



Events 



Security 



Your organisation should install fire 
alarms, sprinklers and fire 
extinguishers to protect your 
organisation's premises and staff. 
Fire safety equipment must be 
regularly checked and serviced. 



If your organisation runs 
fundraising or other events, your 
organisation will need to consider 
whether there are any special risks 
related to the particular event to 
manage. Risk management 
actions in relation to an event could 
include: 

■ telling local authorities (eg 
police or the local Council) 
about your organisation's event 
and obtaining any relevant 
permits if appropriate; 

■ crowd or traffic controls, 
including providing staff or 
volunteers to direct traffic and 
manage car parking, if relevant; 

■ having a special emergency 
evacuation plan in place and 
staff or volunteers to coordinate 
an evacuation; 

■ making sure all relevant 
equipment has been 
maintained and tested before 
use; and 

■ ensuring entry and exits points 
for the event are clearly 
signposted and free of 
obstacles. 



Your organisation should also be 
aware of risks related to security. 
This may include the security of 
your organisation's premises and 
also the security of your 
organisation's staff when they are 
working away from the office or 
travelling to/from the office. This 
handbook does not contain advice 
on security issues. Advice from 
appropriately qualified 
professionals should be sought in 
relation to any security concerns 
your organisation has. 



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FINANCIAL SECURITY 

Regardless of how many staff your organisation 
has or how much money your organisation deals 
with, it is important to have a clear policy which 
sets out the responsibilities of staff when it comes 
to the organisation's money and finances. Some 
policies that your organisation can put in place to 
safeguard its money and financial information are: 



Signatories 
of cheques 


Clearly set out in the rules of your 
organisation or in a relevant policy 
who has authority to sign cheques 
or authorise payments on the 
organisation's behalf (eg two 
directors or the chairperson and the 
secretary). It is a good idea to 
require two signatures on cheques. 
Cheques should never be signed 
without the amount being filled in 
(no blank cheques). 


Keep 
banking 
details 
secure 


The details of the organisation's 
bank accounts and any other 
financial investment should be 
stored someone secure and only 
certain people should have access 
to this information. Passwords 
should never be stored in the same 
place as account numbers. 


Authorisati- 
on to spend 
money 


Not everyone in the organisation 
will necessarily need to have 
permission to spend the 
organisation's money. It is a good 
idea to have a written policy that 
sets out who is allowed to spend 
the organisation's money, in what 
circumstances and how much they 
are allowed to spend (for example, 
your organisation may have a 
policy that certain officers can 
spend up to a certain amount 
without Committee/ Board 
approval, in order to assist with the 
daily running of the organisation). 


Keep 
receipts 


Any person authorised to spend the 
organisation's money should keep 
any receipts and give them to the 
treasurer/finance officer or other 
person in charge of the 
organisation's finances. 


Keep 
accurate 
financial 
records 


Records should be kept of all 
money paid out by the organisation 
and all money received by the 
organisation. The totals of these 
records should match up with the 
totals displayed on your 
organisation's bank statements. 
Keeping accurate records will 
highlight any discrepancy if money 
is missing. 



Ensure 
appropriate 
oversight of 
financial 
records 



For an association, financial 
records should be reviewed in 
detail by the Treasurer on the 
Board or Committee of 
Management. The Committee 
should also review and formally 
approve the records on a regular 
basis. It may be appropriate to use 
an auditor or accountant to review 
the financial records on a regular 
basis. Some types of organisations 
(eg companies and trusts) have 
particular obligations - see the 
Organisation Structures section for 
more detail. 



PROTECTING PROPERTY 

The following steps could be put in place by your 
organisation to safeguard its property: 



Protect 
against 
theft 


To protect your organisation's 
premises against theft, install locks 
on doors, windows and gates, and 
have outside lighting and alarms 
(as appropriate). Your organisation 
may also want to install 
surveillance and security systems. 
Make sure vehicles, equipment and 
machinery are returned to their 
storage areas at the end of every 
day or after use. Money should be 
stored in a secure location. 


Protecting 
data and 
computer 
files 


Protect against electronic theft by 
having passwords on your 
organisation's computers (and tell 
staff to change them regularly), 
install virus protection software or a 
firewall, back up computer files 
regularly and store the back-up 
copies in an off-site location if 
possible. 


Private data 
and 

personal 
information 


Establish and implement a policy 
which sets out how confidential 
data or personal information is 
stored and who has access to it. 


Insurance 


Insurance can be an effective 
means of protecting your 
organisation from the negative 
consequences resulting from theft, 
environmental damage or acts of 
negligence by staff or third parties. 



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OTHER RISK MANAGEMENT TOOLS 

In addition to tine above, tine following are some 
other general tools that can be used to minimise 
risks: 



Policies 



Training 



Contractual 
tools 



Having policies in place to address 
key risks that your organisation 
faces. For example, in relation to 
safety, your organisation may have 
policies about how employees, 
contractors and volunteers perform 
certain tasks in the workplace. 



Ensuring that workers and 
contractors have appropriate 
training qualifications for their roles, 
and that all workers and 
contractors are made aware of the 
organisation's policies and their 
obligations under those policies. 



Warranties and indemnities can be 
included in contracts to make sure 
that one party bears the risk of 
certain events happening under the 
contract (see the Contracts section 
for information on contractual 
clauses). For example: 

■ in a contract for the supply of 
goods to your organisation, a 
clause could be inserted 
requiring the other party to pay 
your organisation for the costs 
of finding replacement goods in 
the event that the supplier is 
unable or unwilling to supply 
them; and 

• your organisation could 
exclude its duty of care to a 
person by agreement. This 
can be by implied agreement. 
For example, if one part of your 
organisation's premises is 
dangerous due to electrical 
faults and electrician agrees to 
enter the area to fix the faults, 
then the organisation may not 
owe the electrician a duty in 
relation to the electrical faults. 

Contractual tools such as 
warranties and indemnities do not 
reduce the chances of events 
occurring, but shift the risk to 
another party by requiring them to 
bear the costs associated with the 
risk. 



1.4 How should your organisation record 
risks and undertake regular reviews? 

Your organisation should ensure it records the 
risks it has identified and the action taken to 
reduce the risk or mitigate the consequences if an 
adverse event occurs. It is common to record 
these things in a 'risk register'. A risk register 
should include: 

■ the type of risk, its likelihood of occurring and 
the likely severity if it does occur; 

■ the date the risk was identified; 

■ the measures being used to reduce the risk; 

- the measures being used to reduce the 
consequences if the risk occurs; and 

■ the assessment used to decide on 
implementation of these measures rather than 
alternatives. 

Your organisation should also conduct frequent 
reviews to: 

■ identify any new risks; 

■ examine whether there are changes in the 
likelihood of an existing risk occurring or its 
consequences; 

■ review the effectiveness of measures being 
used to reduce the risk or its consequences; 
and 

■ consider alternative measures and whether 
they may be feasible to implement. 

The results of these reviews should also be 
recorded in the risk register. Having such 
information recorded can be useful to your 
organisation, to demonstrate to stakeholders that 
your organisation effectively manages its risks. It 
can also be useful to have records to help manage 
any disputes that may arise if these risks occur. 

THE ROLE OF A RISK REGISTER 
A risk register can be very important if your 
organisation faces complaints that it has not met 
the standard of care it owes to a person. A risk 
register could help show that your organisation: 

• identified the risk that occurred; and 

• implemented appropriate and reasonable 
procedures to deal with the risk. 

A risk register may also help to show why other 
procedures were not considered to be reasonable. 



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2 Insurance 

2.1 What is insurance? 

Insurance is one method of managing certain risks. 
Insurance is an agreement winereby one party (tine 
insurer) agrees to pay anotlner party (tine insured) if 
certain adverse events occur (such as a fire or 
robbery) and in return the insured agrees to pay a 
regular fee to the insurer (called a premium). 

An insurance premium is usually a set monthly or 
yearly amount. The amount paid if the relevant 
insured event happens is usually to compensate 
the insured for certain costs related to the event 
(for example this could be the cost of replacing 
stolen or damaged equipment or the medical bills 
of an employee who is injured at work). Insurance 
will usually exclude certain types of costs (for 
example, costs that are too indirect - this might be 
if equipment is damaged, insurance might cover 
the cost of new equipment, but might not cover the 
cost of training employees to use the new 
equipment). 

INSURANCE TERMINOLOGY 

Some key terms to be aware of include the 

following. 

• Insurer: the insurance company that 
provides the insurance policy. 

• Insured: the person or entity protected by 
the insurance policy. 

• Premium: the fee paid by the insured 
(often monthly) for the insurance policy. 

• Excess: an amount payable by the 
insured towards an insurance claim. For 
example, if a policy has a K500 excess 
and a claim is made for K4,000 damage, 
the insured must pay K500 excess and the 
insurer pays the remaining K3,500. 

• Insurance broker: a person that assists 
another person or organisation with 
selecting an appropriate insurance policy. 

• Insurance assessor: a person who 
investigates insurance claims by 
interviewing the organisation making the 
claim and any witnesses, looking at police 
and hospital records, and inspecting 
property, to work how much the insurance 
provider must pay. 



2.2 What types of insurance are available? 

COMPULSORY INSURANCE SCHEMES 

There are two major compulsory insurance 
schemes. 

Workers' compensation 

Regardless of the size of your organisation, if your 
organisation has employees, your organisation is 
required by law to take out workers compensation 
insurance on behalf of those employees. 

Workers compensation provides benefits to an 
employee who is injured or becomes ill, including 
lost wages and medical expenses. 

Injuries and illnesses that happen 'at the 
workplace' includes situations where employees 
are working off-site, where they are travelling to 
and from work, and while they are visiting clients. 

Workers compensation only covers 'employees' 
(that is, people who have an employment contract 
with the organisation), it does not cover contractors 
or volunteers (see Personal Accident or Volunteer 
Insurance, below). 

For specific information on worker's compensation 
see the Employment section. 

Motor vehicle ttiird party insurance 

If your organisation owns or leases motor vehicles, 
it must also take out third party motor vehicle 
insurance. 

The Motor Vehicles (Third Party Insurance) Act 
2002, implemented by Motor Vehicle Insurance 
Limited (MVIL), requires all owners and drivers of 
motor vehicles to be insured in respect of death or 
bodily injury caused by or during the use of a 
motor vehicle. 

If your organisation owns or leases any motor 
vehicles, it must take out an insurance policy to 
protect against third party liability. 

Insurance premiums are paid to MVIL, which is 
responsible for paying compensation money to 
successful claimants. An action for damages 
(monetary compensation) is made against MVIL 
rather than against the individual driver or owner of 
the vehicle. 

Failure to have a current third party motor vehicle 
insurance policy can result in a fine of up to 
K200.00.^^® 



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47 
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VOLUNTARY INSURANCE SCHEMES 

The following insurance policies are not 
compulsory but may help your organisation 
manage certain types of risk. Not all policies will 
be appropriate (or cost effective) to your 
organisation. 

Whether an insurance policy is a worthwhile 
investment requires your organisation to consider 
the cost of the insurance premiums against: 

• the likelihood of something going wrong; and 

• the cost to your organisation if something does 
go wrong. 

If there is a high risk that a particular adverse 
event will happen in the course of your 
organisation's business and the cost of that 
adverse event is high, an insurance policy will 
generally be a good investment. 

Your organisation can also get advice about 
insurance policies that are suitable for the size and 
nature of your organisation from an insurance 
broker or a financial planner. The following list is 
intended to simply provide a brief explanation of 
different type of insurance available. 

Public liability insurance 

Public liability insurance is generally advisable for 
an organisation because most community 
organisations will typically have some involvement 
with members of the public and their property. 
This is particularly so if your organisation owns 
land and often has members of the public visiting. 

Public liability insurance may cover your 
organisation's legal liability to pay: 

■ compensation to third parties (members the 
public) for injury or property damage that 
occurs as a result of your organisation's 
activities (eg a member of the public slips over 
on your organisation's stairs whilst visiting your 
organisation's office or a visitor's car is hit by a 
falling tree on your organisation's property); 
and 

■ the legal costs of defending a claim for bodily 
injury or property damage made against it. 

The cost of compensation and the legal costs of 
defending an action can be very expensive and 
can often exceed the organisation's ability to pay. 

Some contracts require your organisation to have 
public liability insurance (eg agreements to hire a 
building or venue or funding agreements in 



connection with a particular event or project being 
run by your organisation). 

Personal accident insurance (volunteer 
insurance) 

Personal accident or volunteer insurance covers 
your organisation's members or volunteers (all 
non-employees not covered by workers 
compensation insurance) for expenses incurred as 
a result of bodily injury, illness, disability or death 
incurred whilst doing work for the organisation. 
This policy often extends to cover expenses such 
as loss of income where a volunteer can no longer 
work as a result of injuries incurred whilst 
volunteering for your organisation. 

Directors' and officers' liability insurance 

Directors and officers liability insurance provides 
protection for the senior management staff of your 
organisation in case they are personally sued for 
any wrongful act (eg an act of negligence) done in 
the course of the organisation's operations. This is 
generally used by organisations that are 
companies, because directors of companies are 
subject to significant duties and have personal 
liability in some circumstances. 

Wrongful acts could include giving wrong advice, 
failing to supervise an employee or contractor, 
wrongfully dismissing an employee or misleading 
the public. 

This policy only covers directors or officers when 
they are acting in their role for the organisation. 

This policy is useful for larger organisations that 
have a directors' indemnity clause in the 
organisation's rules or constitution. If the rules 
state that the company will pay for the personal 
liability of a director, having directors' and officers' 
liability insurances means that the insurance 
company will actually pay these costs. 

Property, fire and theft insurance 

Property insurance is advisable if your organisation 
owns its building or land. 

If your organisation does not own its land (eg it has 
a lease agreement), it is the landlord's 
responsibility to take out property insurance for 
damage to the building and land but it is still your 
organisation's responsibility to insure the building's 
contents that your organisation owns (eg furniture, 
equipment, machinery and stock). 

This type of insurance typically covers loss or 
damage to property, including land, buildings, 
furniture, equipment and stock. 



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Loss or damage could occur through theft or 
vandalism or specific events such as a fire, storms, 
lightning or flooding. 

Property insurance typically covers the cost or 
repair or replacement of items and structures often 
only up to a certain value (which can be increased 
if your organisation pays a higher premium). 

Fidelity (fraud) insurance 

Fidelity or fraud insurance protects your 
organisation against losses caused by the theft of 
money or property by employees or members of 
your organisation. 

Product liabiiity insurance 

Product liability insurance is relevant to 
organisations that manufacture, sell or distribute 
products to the public as part of the organisation's 
operations. 'Products' can include food sold in 
office kitchens or at fundraising events. 

It takes on your organisation's legal liability to pay: 

■ compensation to third parties (members the 
public) for bodily injury or property damage 
caused by products that your organisation 
manufactures, sells or distributes; and 

■ the legal costs of defending a claim for bodily 
injury or property damage caused by your 
products. 

Product liability insurance is often sold by 
insurance providers as a package with public 
liability insurance. 

Professionai indemnity insurance 

Professional indemnity insurance is only relevant 
to organisations that provide services or advice as 
part of the organisation's operations, eg health 
services or legal services. 

It protects your organisation from its legal liability 
to pay: 

■ compensation to third parties (members the 
public) for economic or other loss or damage 
caused by a wrongful act (including 
negligence) done by your organisation during 
its operations; and 

■ the legal costs of defending a claim for 
economic or other loss or damage caused by a 
wrongful act. 



2.3 How should your organisation clioose 
an insurance provider? 

To operate as a general insurance business or act 
as a broker or loss adjuster in PNG, companies 
must have a licence from the Commissioner of 
Insurance. ^^^ Before your organisation takes out 
an insurance policy or engages an insurance 
broker, it should ensure that the insurer or broker 
has the relevant licence. 

2.4 What are your organisation's 
obligations when taking out an insurance 
policy? 

if your organisation takes out an insurance policy, 
it should: 

■ Provide full and accurate information: the 

insurance application form needs to be 
completely and accurately filled out. If your 
organisation provides the insurance company 
with wrong or misleading information, the 
insurance company can refuse to pay for loss 
or damage when your organisation makes a 
claim. 

Keep the insurance policy up-to-date: 

insurance policies expire and need to be 
renewed (usually every year). Renewing your 
organisation's insurance normally simply 
involves paying the insurance premium, 
confirming your organisation's details and 
confirming that your organisation's 
circumstances have not changed since the 
time your organisation took out the policy or 
the last date of renewal (for example, the 
organisation has not changed the nature of its 
operations, business structure or purchased 
significant new assets). 

■ Tell the insurance company when an 
incident happens: many insurance policies 
require your organisation to tell the insurance 
company about an incident within a certain 
time limit. There will be a set form or process 
that your organisation's insurance company 
will ask your organisation to follow in order to 
make a claim (this should be set out in the 
details of the policy). 



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49 
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2.5 Which risks are covered by your 
organisation's insurance policy? 

Insurance policies are carefully worded to only 
cover damage or loss in particular situations (for 
example, motor vehicle insurance does not cover 
every possible thing that could go wrong with your 
car). When your organisation is considering 
whether an insurance policy is right for it, your 
organisation should consider the following: 

- Terms and conditions: read the terms and 
conditions carefully to see what particular 
events or types of loss your organisation is 
covered for. 

■ Exclusions: carefully review and consider the 
exclusions. These are the things or events 
which your organisation's policy does not 
cover you for (ie the insurance provider will not 
pay you for any loss if it occurs as a result of 
an event expressly excluded from the policy). 
The policy may also exclude your organisation 
from recovering where you behave in a certain 
way that contributes to the risk. 

■ Excess: some insurance policies require your 
organisation to contribute a certain amount 
towards the cost of repair or remedying the 
loss. An excess is paid on top of your 
organisation's insurance premium. Excesses 
are common in motor vehicle insurance 
policies. 

■ Maximum amount that can be 
recovered/caps on recovery: most policies 
will set a maximum amount of money that they 
will pay for when something goes wrong. For 
example, a motor vehicle policy may state that 
your organisation is insured up to the market 
value of the car. 

- Waiting periods: some policies have waiting 
periods which mean that your organisation 
cannot make a claim until you have held the 
insurance period for a certain time. For 
example, a policy may state that a claim 
cannot be made within the first 6 months of 
taking out the policy. 

An insurance policy may also specify particular 
steps your organisation needs to take to prevent 
adverse events occurring or to manage adverse 
events when they do occur. Your organisation 
should ensure it understands these obligations and 
complies with them, as otherwise it may not be 
able to make a claim under the policy. 



2.6 How can your organisation manage 
disputes about insurance policies? 

in the event of a dispute, the first step is to talk to 
the insurance provider, broker or insurance 
assessor. Your organisation's insurance policy will 
set out how to get in contact with the insurance 
provider if your organisation has a complaint about 
how your claim was dealt with or about the service 
your organisation has been provided with. 
Insurance providers, brokers and assessors are 
required by law to have a policy in place which 
sets out the steps in the dispute resolution 
process. The provider must respond to your 
organisation's complaint within 30 days (they can 
either change their decision or uphold their original 
decision). ^^® 

If your organisation cannot settle the dispute with 
its insurance provider, your organisation may 
complain to the Insurance Complaints Tribunal: 
The Insurance Complaints Tribunal can request 
information and documents from any party to the 
complaint and can make decisions requiring one 
party to pay money to the other party. 

If your organisation is unhappy with the Tribunal's 
decision, your organisation can appeal to the 
National Court: The National Court provides a 
venue to review a decision of the Insurance 
Complaints Tribunal. 

RESOURCES 

Wrongs Miscellaneous Provisions Act 1975 

Motor Vehicles (Third Party Insurance) Act 2002 

Business Names Act 1963, Business Names 
Regulation 1964 

Insurance Act 1995 



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50 
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2 Your people 

Employment 



The heart of any organisation is its people. This includes employees, contractors and 
volunteers. This section outlines the law about how your organisation deals with the 
people that work for it. 

When your organisation is hiring, or dealing with its employees, there are a few questions 
it should asl<: 



What type of position does your 
organisation need? 

Different legal rights and obligations apply for 
volunteers, contractors, casual workers, piece 
rate workers, and permanent part-time or full- 
time employees. 

Who should your organisation choose 
when hiring its people? 

Your organisation should conduct an 
objective and fair process to attract 
candidates and select its personnel, and 
cannot unlawfully discriminate in this process. 

There are special rules for hiring non-citizens, 
women and children. 

How should your organisation hire the 
chosen candidate? 

For employees and contractors, the contract 
must cover certain matters. For volunteers, it 
may be useful for your organisation to have a 
written agreement setting out the 
expectations of the volunteer(s) and your 
organisation. 

Are your organisation's benefits for its 
workers lawful? 

Your organisation must provide employees 
with the minimum wage, leave entitlements, 
and various other benefits (including workers 
compensation and superannuation benefits in 
some cases). 



Your organisation must also provide for the 
health and safety of all your people (including 
physical safety and mental safety) including 
ensuring that they are not bullied, harassed 
or discriminated against by other personnel. 

Does your organisation have 
appropriate employment policies? 

Your organisation must ensure certain 
standards of behaviour are maintained by its 
employees and volunteers. 

Is your organisation complying with its 
taxation obligations in relation to 
employees? 

Your organisation must pay salary tax each 
fortnight for each paid employee. Your 
organisation must also comply with reporting 
and record keeping requirements for salary 
tax. 

Does your organisation have 
appropriate procedures for when 
things go wrong? 

Your organisation should have a grievance 
procedure and policy for dealing with 
complaints by or against its employees and 
volunteers. 

Your organisation should ensure it follows 
specific procedures when terminating the 
employment of permanent employees. 



Your People 



52 
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1 Types of employees 

Your organisation may involve a number of 
different types of people: 

■ employees; 

■ contractors; 

■ volunteers; 

■ clients or customers; and 

■ other people who deal with your organisation 
without receiving goods or services (for 
example, family members of employees). 

Sometimes it can be difficult determining how to 
categorise a person. Just because your 
organisation considers someone to fall into one 
category does not mean that they will be treated as 
falling into that category under the law. Your 
organisation will have different legal obligations to 
each category of person, so it is important your 
organisation understands the differences between 
these categories. 



1.1 Employee, contractor or volunteer? 

Generally, your organisation owes more 
obligations to employees than to volunteers and 
contractors, though this depends on the relevant 
circumstances. 

Distinguishing between an employee and a 
volunteer can be difficult. The key test is whether 
the person is paid for more than out-of-pocket 
expenses - if they are only paid for their out-of- 
pocket expenses, they are likely to be a volunteer. 

As between employees and contractors, 
employees are generally under the control of the 
organisation and are paid for the time they work. 
Contractors are independent and enter into 
arrangements with organisations to perform 
specific tasks. A 'contractor' might be a person 
who is self-employed (that is, works alone), or 
could be a business that contracts their services to 
the organisation. Contractors are generally not 
considered to be part of the organisation. 

Figure 1 below provides some general guidance 
about factors that may determine whether a worker 
is an employee, a contractor or a volunteer. 



FIGURE 1 : DIFFERENCES BETWEEN EMPLOYEES, CONTRACTORS AND VOLUNTEERS 



^ j.'.r.u.vW; 


Ali^UKVM 


> 


Performs ongoing work under the 
control of the employer 


May perform one-off or ongoing 
work, but usually as discrete tasks 
and has control over how a task is 
performed 


Performs work on a basis agreed 
with the employer 


Must perform the duties of their 
position 


Duties and ability to end the 
arrangement are set out in the 
contract 


Does not have any obligation to 
perform work and arrangement 
can end at anytime 


Not responsible for providing the 
materials or equipment required to 
do the job 


Provides all or most of the 
necessary materials and 
equipment to complete the work 


Not responsible for providing the 
materials or equipment required to 
do the job 


Cannot delegate their work to 
people outside the organisation 


Whether a contractor can delegate 
their work depends on the contract 


Cannot delegate their work to 
people outside the organisation 


Works hours set by an agreement 
or award 


Works hours it deems necessary 
to complete the job (or as set out 
in the contract) 


Works hours as agreed 


Is paid for time worked 


Is paid as set out in the contract 
(based on time worked or outputs) 


Not paid, but may be reimbursed 
for out-of-pocket expenses 


Is entitled to superannuation 
contributions 


Does not receive superannuation 
contributions 


Does not receive superannuation 
contributions 


Receives paid leave 


Does not receive paid leave 


Does not receive paid leave 


Is held out as being part of the 
organisation 


Is not held out as being part of the 
organisation 


May be held out as part of the 
organisation 


Does not take commercial risks 
and does not generally make a 
profit or loss based on outputs 
(except for commissions/bonuses) 


Takes commercial risks and can 
make a profit or loss from work 
performed 


There is no profit or loss to be 
made 



Your People 



53 
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1.2 What type of employee? 



Figure 2 below sets out some general guidance about factors that may help distinguish between different 
types of employees. 

FIGURE 2: DIFFERENCES BETWEEN TYPES OF EMPLOYEES 



Permanent employe^^^^^^l 


■isual employee ^^^^^^H 


piece rate employd^^^^^^l 


Works a regular amount of hours 
(whether full time or part time) 


Not guaranteed or required to 
work particular hours 


Works periodically 


Paid a salary 


Usually paid by the hour 


Paid a fixed rate for each unit 
produced or action performed 


Paid at intervals of two weeks or 
shorter, or longer if the employer 
and employee agree (but not 
longer than a month) 


Often paid at the completion of 
their shift/ day of employment (but 
is sometimes also paid in the 
general pay run of the 
organisation) 


Paid at intervals of two weeks or 
shorter, or on completion of the 
piece-rate work, whichever is 
earlier 


Leave entitlements 


No leave entitlements 


No leave entitlements 


Must provide notice when 
terminating employment 


May terminate employment 
without notice, unless otherwise 
agreed 


May terminate employment 
without notice, unless otherwise 
agreed 



1.3 What about secondments? 

WHAT IS A SECONDMENT? 

Another type of employment relationship is a 
'secondment'. This is where an individual (the 
secondee) is employed by one employer (the 
employer) but provides services to, and typically 
works at the offices of, another employer (the host 
organisation) for a period of time. 

An organisation may send an employee on 
secondment to another organisation to gain 
specific experience or skills from working at the 
host organisation, or an employee may be sent on 
secondment to help the host organisation build 
their internal capacity. 

RESPONSIBILITIES OF A SECONDEE, THE HOST 
AND THE EMPLOYER 

A secondee is not an employee of the host 
organisation. The secondee's salary, leave 
entitlements and terms and conditions of 
employment do not change during a secondment. 

Generally, the host organisation will pay the 
employer, and then the employer will pay the 
employee as usual (unless agreed otherwise). In 
this way, the host organisation pays for the 
employee's services indirectly through the 
employer. The diagram below sets out this type of 
arrangement: 

FIGURE 3: SECONDMENT ARRANGEMENT 



Host 




May pay money to 


Employer 




Provides 

services 

to 


\ 




/ 


Employs 

and 

nauR 




Employee 




Your People 







The responsibilities of the host organisation and 
the employer organisation should be set out in a 
written agreement, and are generally split as 
follows: 



Rp.Qnnn.ciihi litv ^^^^^H 


=!i'il'lWi 




Employing the employee 


Employer 


Paying the employee's 
wages 


Employer (but may 
be reimbursed by 
host) 


Paying the employee's 
superannuation 


Employer 


Meeting tax obligations for 
the employee 


Employer 


Paying worker's 
compensation insurance 


Employer 


Where the employee 
works each day 


Host 


Supervising the employee 


Host 


Responsibility for 
workplace safety 


Both 


Organisation's policies 
which apply 


Both (some policies 
may be inapplicable) 



DOCUMENTING A SECONDMENT 

If your organisation intends to host a secondee, or 
send one of its employees on secondment, there 
should be: 

■ a written agreement between the two 
organisations, setting out the responsibilities of 
each organisation to the employee; and 

■ a written agreement between the employer 
and the employee under which the employee 
agrees to go on secondment and the terms of 
their secondment are set out. 



54 
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Alternatively, a single agreement could be signed 
by the employee, the employer and the host 
organisation, setting out all of the matters above. 

Issues to consider in drafting a secondment 
agreement or letter to your organisation's 
employee include: 

■ term: when the secondment starts and ends; 

■ relationship: a clear statement that the 
secondee is not an employee of the host 
organisation and the agreement is not a 
contract for service, and (if relevant) that the 
terms and conditions of employment with the 
employer will continue to apply and their 
remuneration will continue to be paid by the 
employer; 

■ role: what the role and requirements of the 
position are, where they will work, who their 
supervisor will be, what hours they will be 
required to work; 

■ policies: what policies the secondee must 
comply with, how they seek approval for any 
leave they wish to take during the secondment; 

intellectual property: who owns any 
intellectual property created by the secondee 
during their secondment; and 

■ ending the secondment: how the 

secondment ends, whether the host can 
request the secondee be sent back to the 
employer and a new secondee send it their 
place, and whether the secondment can be 
renewed. 

1.4 Clients, customers and others 

Your organisation also has obligations to clients, 
customers and the general public who your 
organisation and its people come into contact with. 

HEALTH AND SAFETY OBLIGATIONS 

If your organisation occupies a premises, then the 
organisation can be liable for injuries which occur 
on those premises. An organisation must take 
steps to make sure that all visitors are reasonably 
safe 



159 



Further, your organisation has a general obligation 
to make sure its activities and the activities of its 
staff and volunteers do not cause loss or injury to 
other people. Your organisation must always be 
aware of what risks its activities pose to others and 
take all reasonable steps to minimise the risk of 
harm. 



Please refer to the Managing Risk section for 
further guidance on your organisation's obligations 
in relation to the health and safety of clients, 
customers and others. 

ANTI-DISCRIMINATION OBLIGATIONS 

Your organisation must ensure it does not treat 
someone less favourably, for example because 
they are a woman or because they are infected 
with or affected by HIV/AIDS. This applies to 
everyone your organisation comes into contact 
with. 

Further, it is illegal for organisations which hold a 
government licence to provide goods or services in 
a way that favours a group of people due to their 
colour, race, ethnicity or origin.^®" 

Your organisation may be held responsible for the 
activities of its employees and volunteers in some 
circumstances, so it is important that your people 
are advised of their anti-discrimination obligations. 

Refer to the Discrimination section for guidance on 
your organisation's anti-discrimination obligations. 

CONSUMER PROTECTION OBLIGATIONS 

Please refer to the Dealing with the Public section 
of this handbook for guidance on your 
organisation's obligations in relation to consumer 
protection. 



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2 Hiring people 



2.1 What position does your organisation 
need to fill? 

The people who contribute to an organisation are 
the key to that organisation's success. As such, 
when a vacancy in your organisation arises, it is 
important that your organisation chooses the right 
person for the job. 

It is important that your organisation considers the 
following issues: 

■ What are the key responsibilities and duties of 
the position to be filled? 

■ Are there any specific skills or experience 
needed to undertake these duties? 

■ What type of worker will be best suited to this 
position? A permanent employee, a casual 
worker, a contractor for a fixed period or a 
volunteer? 

Your organisation should also consider any 
specific requirements for the role. 



2.2 How should your organisation select a 
candidate? 

Your organisation should not refuse to hire 
someone because of their race, tribe, origin, 
political opinion, colour, creed, religion, or HIV 
status, as this may be discrimination and be 
unlawful. 

Taking the following steps may be useful in 
ensuring your organisation hires the best person 
for the job and does not unlawfully discriminate; 

DEFINE THE POSITION 

■ Prepare a detailed job description so 
applicants can understand the duties, 
accountabilities and outcomes expected of the 
position. 

■ Make a list of the key skills and experience the 
applicant needs to do the job, so your 
organisation has selection criteria to judge 
applicants against. The selection criteria need 
to be as objectively measurable as possible. 

■ Have another member of your organisation 
review and assess both the job description and 
the selection criteria. It is important that the 
two align. 




©Josh Estey/CARE 



Your People 



56 
© King & Wood Mallesons 



PLAN TO RECRUIT 

■ Determine whether this is a job which must be 
offered to a PNG citizen or whether it can be 
open to both citizens and non-citizens. 

■ Determine whether there are any elements of 
the job that mean someone with particular 
characteristics must perform it. Your 
organisation should ensure that selecting 
someone because of these characteristics is 
not unlawful discrimination. See the 
Discrimination section for further details. 

■ Decide and document the application process 
(eg, how many interviews will be required and 
how the applicants will be assessed against 
the selection criteria). 

ATTRACT APPLICANTS 

■ Decide the best method of advertising. 
Advertising is generally recommended as it 
increases your organisation's chance of finding 
the best person for the job and helps to show 
that your organisation is conducting an open 
process. 

■ Circulate the selection criteria as part of the job 
advertisement or set up a mechanism for 
applicants to access the selection criteria 
before they apply. This allows applicants to 
assess whether they are appropriate for the 
job and will save your organisation from 
reviewing inappropriate applicants. 

SELECT AN APPLICANT 

■ Shortlist the applicants. It is important that 
your organisation applies the same criteria for 
reviewing all applications, keeps records about 
how each application was assessed, and 
ensures that each application is assessed in 
the same way. 

■ Establish a precise procedure that will be 
followed in relation to each applicant when 
they attend for an interview. It can be useful to 
prepare a plan or a list of questions for the 
interview which is used for each applicant. 

■ Prepare a standard assessment form to be 
completed at the end of each interview. 

■ A second interview may be useful if it is difficult 
for your organisation to make a decision. 

■ It may be appropriate to contact the applicant's 
references to discuss their work history. It is 



usually not appropriate to ask questions or 
discuss the person's personal life with the 
referee. 

Your organisation may also consider hiring 
someone on 'probation'. This means that the 
person is hired for a period of time (the probation) 
to evaluate their performance before being offered 
permanent employment. For example, your 
organisation may hire someone on a 3 months' 
probation, and at the end of the period their 
performance is assessed and if they performed 
sufficiently well they are offered employment on a 
normal basis. The contract of employment should 
clearly set out what the probation period is, what 
happens at the end of the period and (if 
appropriate) the conditions on which continuing 
employment will be provided. 

REQUIRING MEDICAL TESTS 
For certain positions, some organisations may 
require that new employees undergo a medical 
test prior to commencing employment. If your 
organisation is intending to do this, it must make 
sure that it complies with its legal obligations. For 
example, it is illegal to require an employee to 
undergo a HIV/AIDS test or to secretly test an 
employee for HIV/AIDS without their consent. See 
the HIV/AIDS section for further information. 



2.3 Hiring a non-citizen as an employee or 
volunteer^^^ 

WHAT ARE YOUR ORGANISATION'S 
OBLIGATIONS? 

If your organisation wants to hire someone who is 
not a PNG citizen (either as a volunteer or an 
employee), your organisation needs to ensure they 
have both a valid work permit and a work visa. 
There are some exceptions for volunteers with 
particular aid organisations and for dependent 
spouses. Your organisation should contact the 
relevant Government department (listed below) for 
further information if this may apply to your 
organisation. A person or organisation who 
employs a non-citizen without a work permit is 
guilty of an offence. 

In addition, the salary/wages tax that your 
organisation will need to deduct for the non-citizen 
is likely to be different to that for its employees who 
are PNG citizens (see the part below on Deducting 
Tax). 



Your People 



57 
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HIRING A PERSON FROM OVERSEAS 
If your organisation lias brougint someone to 
Papua New Guinea from overseas, your 
organisation must also pay for the person, and 
possibly their dependents, to return home once 
they stop working for your organisation. 

If the person dies during their time with your 
organisation or on their journey home, your 
organisation may have to pay for the coffin and the 
transportation of the deceased's body to the place 
the deceased usually lived. 

HOW TO GET A WORK PERMIT 

There are three types of work permits: 

■ general work permit: for work of a 
commercial nature; 

- volunteer work permit: for work of a 
voluntary nature; and 

■ 'bridging' work permit: for when a valid work 
permit is about to expire and the new work 
permit has been delayed. 

A work permit will only be granted if the employer 
has advertised the position and there is no suitable 
PNG citizen who can be employed in the 
occupation. 

The steps for obtaining a work permit are as 
follows: 

■ An application must be filled out. The 
application is found in the Employment of Non- 
Citizens Regulation 2008. The application 
must include the documents specified in the 
application form, and the application fee; 

- the work permit application must be sent to the 
Secretary for the Department of Labour and 
Industrial Relations; and 

- written notice of the grant or refusal of an 
application should be given to the applicant 
within 42 days of lodging a correct and 
compete application. 

The permit should be obtained before the 
employee/volunteer arrives in PNG. If the 
application is refused, the non-citizen has 14 days 
to appeal the decision. 



FURTHER INFORMATION 

The Foreign Employment Division of the 

Department of Labour and Industrial Relations has 

published a very useful guide on the employment 

of non-citizens and obtaining a work permit. It can 

be obtained from their website 

(http://www.workpermits.gov.pg). 

See also the Department of Immigration and 
Citizenship Services website 
(http://www.immigration.gov.pg) for further 
information on obtaining visas. 

2.4 Hiring a person under 16 years of age 

When hiring children between the ages of 15 and 
1 8 years old,^^^ your organisation must submit 
certain details of the employment proposal and 
seek approval from the Director of Lukautim 



163 



Pikinini. Failure to do so may result in a fine of 
up to K2,000 or six months imprisonment. 



164 



Your organisation may employ workers between 
the ages of 1 1 and 1 6 years old with the following 
additional restrictions: 



165 



■ your organisation must have written consent to 
the employment from the child's parents; 

■ your organisation must have a medical 
certificate indicating that the child is fit for the 
type of employment. Your organisation must 
pay for this certificate; 

■ your organisation must not employ the child 
during school hours, unless they are 14 or 15 
and the organisation believes that they are no 
longer at school; 

■ your organisation cannot employ the child 
between 6pm and 6am; and 

■ the child must not work in a place where they 
will get hurt or are likely to get hurt. 

Your organisation must not employ a person under 
11 years old. 

Additionally, your organisation must not allow a 
child to undertake activity that may be harmful to 
their health, education, mental, physical or moral 
development, or well-being. 



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3 Employment contracts 

Your organisation must inave an employment 
contract witin eacin permanent employee, setting 
out the terms of employment. The contract can be 
verbal or in writing. 

It is generally advisable that the contract is in 
writing so that the parties have an accurate record 
of their agreement. A written agreement can be 
used to prohibit your organisation's employees or 
volunteers from disclosing confidential information 
of your organisation 



166 



However if a verbal contract is initially made, it is 
advisable that your organisation make a written 
record of the terms and conditions of the contract. 

3.1 How should your organisation finalise 
a written employment contract? 

If the contract is written, the law requires that: 

■ the contract must be signed in the presence of 
a labour officer appointed under the 
Employment Act; 

- the employee signs the contract, certifying that 
they have read, understood and agreed to its 
terms; 

- the employer signs the contract, and notes that 
he believes that the employee can read, and 
that the employee has read and understood it 
prior to signing; 

■ the labour officer certifies that the employee 
has freely consented to entering into the 
contract and that they understand the terms of 
the contract and are not bound by any 
previous contracts; and 

- the employer and employee must each take a 
copy of the employment contract. 

3.2 Do special requirements apply for the 
type of worker your organisation is hiring? 

VOLUNTEERS 

Your organisation does not need to have a written 
agreement with its volunteers. 

However, it may be a good idea to have an 
agreement setting out your organisation's policies 
and expectations for your volunteers to sign 
because your organisation may want to take 
advantage of their work and may be legally 
responsible for their conduct. For example, the 
confidentiality obligations imposed under HIV/AIDS 



legislation applies to unpaid workers as well as 
paid staff. 

AGREEMENTS WITH VOLUNTEERS 
An agreement with your volunteers should make it 
clear that the individual is engaged as a volunteer 
and generally should not contain the same content 
as an employment contract (eg information about 
wages). Otherwise, your organisation's volunteers 
may in fact be employees and your organisation 
will need to provide them all of the protections and 
entitlements given to other employees. 

Executives / Senior Managers 

Because executives and senior managers (for 
example, an Executive Director) occupy special 
and high-level roles, your organisation may 
consider including in their contract special 
provisions which your organisation would not 
typically include in employee contracts. 

For example, these might include: 

■ restrictions on the individual acting for other 
organisations during (or for a reasonable 
period after) their employment; 

■ stricter or more specific confidentiality 
provisions (owing to their access to a greater 
range of, and more sensitive, information); and 

■ specifying the circumstances in which their 
employment may be terminated. 

Your organisation should seek legal advice about 
including these provisions in the contract to ensure 
that they are enforceable and drafted 
appropriately. 

3.3 What is generally included in an 
employment contract? 

Your organisation must tell the prospective 
employee:^^^ 

■ the name of the employer; 

■ the name of the place of employment; 

■ the location of the place of employment; 

■ the occupation in which they are to be 
employed; 

■ the nature of work involved in the occupation; 

■ the total wage to be paid and the deductions (if 
any) to be made; and 



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■ the manner of paying wages including tine 
arrangements proposed in respect of 
refundable deductions (if any). 

The following topics may also be included in a 
contract of employment. 

■ Duration: date of commencement of 
employment and (if employment is for set 
period) date of termination. 

■ Probation: whether there is a probation period 
and how the employee's performance will be 
assessed at the end of the probation period. 

■ Pay: how much, when and how it is paid, 
superannuation arrangements, pay reviews, 
and other benefits (eg housing, food, 
discounted travel etc). 

Duties, role and responsibilities: what the 
employee's role is, what tasks they will be 
required to undertake, who they will supervise 
and who their supervisor will be. 

■ Performance: when and how the employee's 
performance will be reviewed, and how the 
organisation will deal with unsatisfactory 
performance. 

- Working hours: when the employee is 
required to work (days, hours etc). 

■ Exclusivity and conflicts of interest: 

whether the employee is also permitted to be 
employed with another employer or earn any 
other income at the same time. 

■ Confidentiality: the employee's obligations to 
keep information confidential. This may 
especially be the case where your organisation 
has confidentiality obligations imposed by law 
(for example, under the HIV/AIDS legislation if 
your organisation works with persons affected 
by HIV/AIDS. See the HIV/AIDS section for 
further information) or to protect your 
organisation's own information. The terms of 
the contract may itself be confidential. 

Leave entitlements: what types of leave the 
employee is entitled to and how much leave. 
This might refer to the organisation's policies 
(if the organisation has relevant policies). 

Intellectual property: if appropriate, a 
provision that any intellectual property created 
or developed by the employee in the course of 
their employment vests in the organisation. 



Grievance procedures: how the organisation 
will deal with any complaint by the employee 
(about the organisation or about another 
employee). 

■ Misconduct and discipline: how your 
organisation will deal with any allegations of 
misconduct by the employee, and when 
disciplinary action may be taken. 

■ Termination: the circumstances in which the 
employment can be terminated (by the 
organisation and by the employee), including 
how much notice needs to be given. Also what 
is to happen on termination (for example, that 
all materials or information must be returned to 
the organisation). 

Some of the above issues (and additional issues) 
can be dealt with in your organisation's policies 
instead of the employment contract. This will allow 
your organisation to amend the policies over time. 

It is important that the contract of employment 
specifies whether those policies form part of the 
contract or not. Care should be taken if the 
organisation's policies form a part of the contract, 
as they will be legally binding and enforceable 
between the parties. For example, if there is a 
policy relating to termination procedures, those 
procedures may need to be followed in order for 
the termination to be lawful. In addition, policies 
may be amended from time to time and these 
changes will be incorporated in the contract. 

Your organisation's employment contracts must be 
consistent with the employee's legal rights and 
entitlements set out in the next part. 



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4 Employees' rights 

This part describes tine minimum rigints and 
entitlements tinat your organisation must provide to 
its employees. Your organisation can always 
provide more generous rights and entitlements 
than the minimum requirements - and this can 
help your organisation attract the best applicants. 

This part applies to employees. In relation to other 
people: 

■ for volunteers, most requirements in this part 
are not relevant - though your organisation 
may wish to provide volunteers at least the 
same rights as employees, except in relation to 
salary and financial benefits (eg working 
hours); and 

- for contractors, no requirements in this part 
apply - any arrangements or expectations 
about pay, working hours or other conditions 
can be negotiated by agreement. 

4.1 Payment 

Minimum pay 

Your organisation must pay employees at least the 
minimum wage. 

As at the date of publication, the National Minimum 
Wage is K22.96 per week. This applies to every 
adult working in PNG, regardless of where they 
live or what job they are employed in. There is 
also a National Minimum Youth Wage for people 
who are unskilled and under 21 years of age which 
is K1 7.22 per week. 

Different rates may apply to employees that have 
been working, either for your organisation or for 
another employer, prior 15 September 1992.^®^ 

Allowances 

in addition to the National Minimum Wage, your 
organisation may be required to pay your 
employees certain allowances. These allowances 
may include: 

■ camping allowance; 

■ heavy-duty allowance; 

■ tools allowance; and 

■ rural hardship allowance. 



How MUST YOUR ORGANISATION PAY ITS 
EMPLOYEES? 

Your organisation must pay its employees in kina 
by postal order, cheque or into a bank or saving 
society account. Your organisation must also 
provide a payslip when payment is made, which 
should include: 

the gross amount of ordinary wages earned; 

the amount of pay earned for overtime, call-out 
and stand by duty; 

the amount of any extra payment; 

the amount of any deductions made from the 
employee's wages and the reasons for those 
deductions; 

the net amount of wages due; and 

the dates of the pay period. 

Every employer must keep a register to record the 
wages paid to each of their employees and any 
deduction made from wages, and the reason for 
the deduction. In some circumstances your 
organisation may need to withhold tax from your 
employees' wages/salary (see the part below on 
Deducting Tax). 

4.2 Superannuation^^^ 

If your organisation has 15 or more employees, it 
must contribute to an Authorised Superannuation 
Fund (ASF). Other organisations may decide 
whether to make contributions. 

If your organisation must make ASF contributions, 
it should make the monthly contributions within 14 
days of the end of each calendar month for each 
employee who has been employed for 3 or more 
months. Your organisation may also decide to 
make higher contributions. 

Employees must also make contributions 
themselves if they have been employed for three 
months or more with the same employer. Your 
organisation should take these contributions 
directly out of employees' pay. 

FURTHER INFORMATION 

For further information about superannuation, see 

the National Superannuation Fund Limited website 

(http://www.nasfund.com.pg). 



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4.3 Working hours 

Standard hours 

Generally, your organisation's employees should 
not work more than eight hours In one day.^^° It Is 
good practice to apply this policy to volunteers 
also. 

Your organisation's employees can only work 
longer than this: 

■ If necessary to care for the sick or elderly 
people; 

■ If needed so public utilities continue operating; 

- where necessary to prevent the loss of goods; 
or 

■ In an accident or other emergency.^^^ 

However, an employee can also be required to 
work reasonable additional hours as overtime. 



Overtime 

An employee will work overtime If they work:^''^ 

- more than eight hours In one day; 

■ after 12 noon on a Saturday; 

■ on a Sunday; or 

■ on a public holiday. 

If an employee works overtime, your organisation 
must pay the employee: 

- for overtime worked on a Sunday or a public 
holiday, twice the hourly rate; and 

- for overtime any time other than a Sunday or a 
public holiday, one and a half times the hourly 
rate. 




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Rest periods 



4.5 Insurance 



Your organisation's employees are entitled to the 
following rest periods: 

- if they work for eight hours - at least 50 
minutes; 

■ if they work for five hours - at least 40 minutes 
(or 30 minutes with an extra 1 minute 
break).^^^ 

4.4 Leave entitlements 

Your organisation only needs to provide leave 
entitlements to full and part time employees, not 
casual employees. ^^"^ 

The minimum leave entitlements are: 

■ Recreational leave: this is leave an employee 
is entitled to take at a time agreed with their 
employer. Each employee is entitled to 14 
days paid recreation leave every year. 

■ Sick leave: this is leave for when an employee 
is sick and cannot work. Your organisation 
can require that the employee show a medical 
certificate to prove they were sick when they 
take sick leave. Each employee is entitled to 
six days sick leave each year once they have 
been employed by the same employer for six 
months. 

■ Long service leave: this is leave which is 
given to an employee once they have worked 
for your organisation for a specified period of 
time. Your organisation's employees may be 
entitled to such leave as a result of an 
employment award. 

■ Compassionate leave: this is leave for when 
an immediate relative is unwell or has died. 
Your organisation's employees may be entitled 
to such leave as a result of an employment 
award. 

Your organisation must generally pay employees 
during any periods of leave (although whether an 
employee should be paid for compassionate leave 
depends on the terms of the employment award). 

Maternity leave and nursing leave is discussed 
further below. Your organisation does not need to 
pay employees during maternity leave unless your 
employee chooses to convert recreational leave or 
sick leave into paid maternity leave. 



If your organisation has employees, it must insure 
its workers for work-related injuries with a licensed 
insurer. Insurers are then required to contribute to 
the workers compensation fund using part of the 
premiums paid by employers. 

It is against the law for your organisation to not 
hold an adequate workers compensation insurance 
policy or not keep records about employees' 
occupations and wages for three years. 

Your organisation may also consider providing 
insurance coverage for its employees beyond 
worker's compensation, for example for medical 
insurance. When taking out an insurance policy 
for your employees your organisation should 
carefully check the terms of the insurance to see: 
who it covers (eg whether it covers volunteers and 
casual employees) and what it covers (eg in what 
circumstances a claim can be made). Many 
insurers will not provide coverage for volunteers. 

See the Managing Risk section for more 
information on insurance generally. 

4.6 Entitlements arising from awards 

An employment award is a set of employment 
terms and conditions agreed between an employer 
and a group of employees which apply either to 
particular workplaces, industries or groups of 
employees. An award can alter the terms and 
conditions otherwise prescribed in the Employment 
Act. 

It is possible that a registered award applies to 
some or all of your employees. If so, your 
organisation must make sure that any relevant 
contract of employment and the relevant 
employees' working conditions comply with the 
relevant award. 

WHAT ARE AWARDS? 

Awards are typically registered by unions on behalf 
of employees. Accordingly, if your organisation 
has employees who are members of a union it may 
be prudent to check with the Office of the Industrial 
Registrar, Department of Labour & Industrial 
Relations as to whether there are any awards that 
apply to your organisation's employees. 



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4.7 Entitlements for women 

Your organisation must not discriminate against 
women (see tine Discrimination section for furtiner 
details) in relation to employment conditions. 

However, the law places certain restrictions on the 
type of jobs that women can hold.^''^ Women 
cannot work between the hours of 6 p.m. and 6 am 
except where the female employee: 

■ holds a responsible position at a managerial or 
technical level; 

■ is employed in health or welfare services; or 

■ is employed in an undertaking in which only 
members of the same family are employed. ^^^ 

Although these restrictions only apply to female 
employees, as a matter of good practice female 
volunteers should also be given the same rights. 

Pregnant women and new mothers 

The law imposes special obligations on employers 
of pregnant women and new mothers. ^^^ 

Rights on pregnancy: a pregnant employee 
is entitled to terminate her employment without 

178 



penalty. A pregnant employee's 



employment cannot be terminated on grounds 
arising from the pregnancy unless she has 
been employed for less than 90 days.^^^ 

lUlaternity leave: a pregnant woman is entitled 
to unpaid maternity leave provided that she 
has been employed for either: 

o at least 1 08 days in the last year; or 

o at least 90 days in the last six months.^®" 

The unpaid maternity leave will be for the 
period of hospitalisation plus six weeks. ^^^ 

During a period of maternity leave, a woman's 
employment cannot be terminated except by 
mutual agreement^®^ and the woman may 
resume her employment at any time as long as 
she obtains a certificate as to her medical 
fitness. 



183 



184 



Nursing leave: an employee who is nursing 
her child is entitled to at least two half-hour 
periods during normal working hours away 
from her duties in order to nurse her child 
Nursing related absences are counted as 
working hours for the purpose of calculating 

185 

wages. 




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5 Employment policies 

It is good practice for your organisation to inave 
policies which apply to employees and volunteers. 
This gives your organisation the flexibility to 
change its terms of employment over time 
provided these are referred to each employee's 
contract of employment. 

A handbook of policies can be a useful resource 
for employees and volunteers to refer to see what 
rights and obligations they have. 

A handbook can also be useful for your 
organisation to establish good practices and to 
make it easier to understand your organisation's 
legal obligations. 

Policies to be included in a handbook may include: 

■ an anti-discrimination policy, setting out your 
organisation's principles and standards in 
hiring and treating its people; 

■ a policy setting out appropriate use of your 
organisation's equipment and technology; 

■ a grievance policy, setting out the process to 
be followed if any of your organisation's 
employees have a complaint; 

■ a disciplinary action policy, setting out how 
underperformance and allegations of 
misconduct will be managed; 

■ a leave application policy; and 

■ a health and safety policy. 

The Governance section of this handbook contains 
further information about policies. 



6 Health and safety at work 

Occupational health and safety (OHS) laws protect 
the health, safety and welfare of persons who work 
at or enter a workplace. This includes employees, 
volunteers, clients and visitors. 

6.1 Is your organisation subject to OHS 
laws? 

Yes. 

All organisations are responsible for ensuring the 



186 



In 



health, safety and welfare of their people, 
certain dangerous industries (eg mining) 
organisations have more specific duties. 

Additionally, all organisations should create a safe 
physical environment for clients and other visitors 
and make sure that their activities do not cause 
loss or harm to other people. Otherwise, your 
organisation may be liable for any damage caused. 

6.2 What are your organisation's 
responsibilities? 

Ensuring health and safety of your 
organisation's people 

If your organisation has employees, it must take 
reasonable care for the safety of their employees. 
This involves four types of specific responsibilities: 

■ the duty to ensure staff are competent; 

■ the duty to provide proper equipment; 

■ the duty to provide a safe work place (including 
any place the employee may go as part of their 
work)^^^; and 

■ the duty to provide a safe systems of work.^^® 

The specific steps your organisation needs to take 
depend on the circumstances, and particularly 
whether: 

■ there is a risk of injury which is reasonably 
foreseeable; 

- how serious the injury could be; and 

■ how practical, expensive or difficult it would be 



to deal with the risk 



189 



For example, if there is an obvious and serious 
risk, your organisation will need to deal with that 
risk. However, if a risk is very unlikely to occur, 
your organisation may not need to deal with that 
risk if the only solution is very expensive or difficult. 



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The courts will award damages (that is, require 
money to be paid) to an employee who has been 
injured, when this injury is connected with the 
employer's failure to provide a safe workplace and 
for breaches of any legislation.^^" 

Other safety standards 

There are more specific duties that relate to 
particularly dangerous work (eg mining). ^^^ For 
example, in those industries, an Industrial Safety 
Officer may also set out additional safety 
standards. 

Industrial Safety Officers and Medical Officers are 
allowed to inspect your organisation's workplace 
and question employees to ensure your 
organisation is complying with its OHS 
obligations. ^^^ 



Paying compensation to injured 
employees 

If an employee is injured in the course of their 
employment, your organisation may have to pay 
them compensation. ^^^ 

This can include injuries that occurred when the 
employee is: 

■ travelling to work from home, or from home to 
work, or between workplaces; 

■ travelling to training approved by your 
organisation or to obtain a medical certificate; 
or 

■ at work (even if before they start or after they 
finish work, and during breaks). ^^"^ 




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Health and safety obligations to the 

PUBLIC 

Your organisation also should ensure, as far as is 
reasonably practicable, the health and safety of all 
persons who come into contact with your 
organisation. This includes contractors, clients 
and the public in general who come into contact 
with your organisation's activities. 

EXAMPLE 

If your organisation provides food to clients, your 
organisation needs to take steps to ensure that the 
food is properly stored, cooked and distributed so it 
does not to make people sick. 

6.3 What are your organisation's 
responsibilities for its employees' actions? 

In some circumstances your organisation may be 
responsible for the action of your employees (for 
example, if they cause damage or loss to someone 
in the course of their employment, your 
organisation may be held responsible). This is 
known as 'vicarious liability'. 

VICARIOUS liability 

Even if an injury is the result of an employee or a 

volunteer's actions, your organisation may still be 

legally responsible for the harm (and for paying 

any compensation). Your organisation will be 

expected to have taken steps to avoid the risk 

arising. 

6.4 What should your organisation do if 
there is an incident? 

Your organisation should have a policy setting out 
exactly what should happen if there is a workplace 
incident. The policy should ensure: 

- every incident is assessed to make sure 
nobody else gets hurt, and medical treatment 
is given to anyone who needs it as soon as 
possible; 

■ if your organisation is insured, the insurer is 
notified; 

■ the Registrar of Workers' Compensation is 
notified within seven days of a serious injury 
occurring (even if there is no claim for 



compensation); 



195 



if an employee under a written contract dies, 
the labour officer who witnessed the contract 



- the incident and all action taken by your 
organisation is documented. 

Although not required by law, it is a good idea for 
someone in your organisation to be responsible for 
co-coordinating responses to workplace incidents. 

Your organisation should also consider any cultural 
issues in responding to a safety incident. For 
example, your organisation may be expected to 
compensate an employee for injury in the 
workplace, even if the organisation does not have 
to do so. This is especially the case if an 
employee dies while at work. Your organisation 
may consider providing greater compensation or 
assistance than it is legally required to (for 
example, providing some salary while the 
employee is unable to work, or paying for and 
organising a funeral). This may help the injured 
employee and their family and help to reduce any 
harm to your organisation's reputation caused by 
the incident. 

6.5 What practical steps can your 
organisation take to meet its OHS 
obligations? 

Your organisation should take steps to manage 
workplace risks before an incident occurs. The law 
does not state exactly what is required, but the 
following steps can help reduce the risk of your 
organisation breaching its obligations. 

■ Conduct risk audits: your organisation should 
regularly assess the risks that may arise in 
your organisation's workplace. Your 
organisation should then assess the possible 
solutions and take appropriate action. The 
results of audits should be properly recorded 
so that action items can be addressed. 

Create an incident register: to record all 
accidents, injuries or near misses. Items 
recorded in the register can then be addressed 
as part of safety improvements on an ongoing 
basis (including when risk audits are 
performed). 

■ Appoint an employee as an OHS officer: 

your organisation could appoint one person to 
be responsible for workplace safety issues, 
organising audits and managing the incident 
register. This person should attend training to 
ensure they understand their responsibilities. 



196 



signing is notified as soon as possible; and 



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Create a workplace safety policy: this should 
be easily accessible by employees and 
volunteers, and your organisation should make 
sure it is followed. 

Training and communication: it is also a 
good idea to train and regularly communicate 
with all staff, volunteers, helpers and members 
about safety, health and welfare issues at the 
organisation. 




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7 Deducting tax from 
employees' salary 

GENERAL INFORMATION ONLY 
This part contains a general overview of the 
deduction of tax by the employer from employees' 
salary/wages. This is intended as a general guide 
only and does not take into account the 
circumstances of your organisation or its staff. If 
your organisation has questions related to tax, 
your organisation should contact the Internal 
Revenue Commission or seek professional advice. 

For information on other types of tax, please see 
the Taxation section of this handbook. 

7.1 Does your organisation need to pay tax 
for its employees? 

If your organisation employs people who are paid 
more than K1 1 per week, your organisation must 
deduct tax from employees' salaries every fortnight 
(even if the employees are not paid fortnightly.^^'' 
The tax is paid to the Internal Revenue 
Commission (IRC).^^® Your organisation should 
take special care in deducting and remitting 
salary/wages tax because it impacts upon its 
employees and also there are penalties payable 
for failing to correctly comply with its obligations. 

7.2 How does your organisation deduct 
and pay salary/wages tax? 

Register with the IRC 

If your organisation employs people who are paid 
more than K1 1 per week your organisation must 
register as a group employer with the IRC.^^^ The 
forms to do this (and further information on this 
topic) are available from the IRC. Registration 
must be completed within seven days of beginning 
to employ persons for whom salary/wages tax 
must be deducted. Once registered, the IRC will 
provide your organisation with a Group 
Registration Number. 

Obtain a Declaration from your 
organisation's employee (if necessary) 

Your organisation must ensure its employees 
provide a completed and signed 'Salary or Wages 
Tax Declaration' form (available from the IRC) 

If your employee has more than one employer, 
they should only lodge a declaration with your 



organisation if your organisation is their main 
employer. ^°^ 

Each fortnight deduct tax and provide it 
to the irc monthly 

Once your organisation has registered with the 
IRC and received the Declaration, your 
organisation must: 

■ each fortnight - deduct the correct amount of 
tax from your employees' wages; and 

■ by the seventh day of each month - pay the 
IRC the tax deducted from all employees for 
the previous month. ^°^ 

The current tax rates are available from the IRC. 
The amount of tax to deduct depends on factors 
such as the employee's salary, whether the 
employee has any dependants (eg children), the 
employee's other benefits (eg housing allowance) 
and whether the employee is a resident of PNG 
(see the 'International Staff box below). This 
should be set out in the Declaration 



203 



200 



Your organisation must only pay tax based on an 
employee's Declaration when your organisation 
first pays the employee their wages. ^"'^ A 
remittance advice must be submitted to the IRC 
every month, even if no tax has been deducted for 
that month. Only one remittance advice should be 
sent per month. Your organisation may have to 
pay a penalty or additional tax if your organisation 
is late in sending this advice. ^°^ 

WHAT IS 'SALARY AND WAGES'? 
According to the IRC, for tax purposes salary or 
wages generally includes: 

■ salary, wages, commission, bonuses, 
remuneration of any kind, or allowances paid 
in respect of the person's employment; and 

■ any remuneration for professional services or 
services as an adviser, consultant or manager 
where such remuneration is paid wholly or 
substantially for personal services rendered by 
that person in PNG, including payments made 
under a contract for labour, by a company to 
remunerate a director, superannuation, or 
commission to an insurance or time-payment 
canvasser or collector. 

Salary or wages does not include exempt 
income.^"® Some US Peace Corps volunteers may 
be tax exempt.^"^ 



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Your organisation sinould also be aware tinat 
allowances and benefits provided to employees 
are also liable to taxation (although not necessarily 
for their full value). Examples include the provision 
of housing, car, meals or discounted airfares. ^°^ 
Lump sums paid on termination are also likely to 
be considered salary and wages. ^°^ 

Ongoing matters and annual reporting 

An employee should prepare a new Declaration if 
they start or stop looking after a dependent 



210 



At the end of the year, your organisation must 
prepare a Statement of Earnings for each 
employee (in quadruplicate). This is a summary of 
the salary or wages paid to the employee and the 
amount of tax deducted for the relevant year. The 
two copies of the Statement of Earnings should be 
given to the employee, a copy given to the IRC 
and a copy should be retained by your 
organisation. 

A Statement of Earnings for each employee should 
be given to the IRC by 14 February each year, for 
wages paid and tax deducted for the previous 
year. A statement must also be prepared and 
given to an employee within 7 days of when they 
finish working for your organisation. The forms for 
the Statement of Earnings are provided by the 
IRC. They need to be completed accurately and 
carefully. There are specific procedures to be 
followed if a Statement of Earnings contains a 
mistake, is lost or is destroyed, and if this occurs 
the IRC should be notified immediately. 

Your organisation must include a Reconciliation 
Statement with each Statement of Earnings (the 
required forms are provided by the IRC). This 
reconciles the amount of tax remitted during the 
year by the organisation against the amounts in 
the Statements of Earnings for each employee. ^^^ 



INTERNATIONAL STAFF 
The amount of salary or wages tax your 
organisation must deduct from your employees 
depends on whether or not they are PNG 
residents. ^^^ A person can be both a non-PNG 
citizen and a PNG resident. 

Generally, an employee is treated as a PNG 
resident for a particular year if they spend over six 
months in PNG. This period does not need to be 
continuous 



213 



Additionally, if your organisation employs non-PNG 
citizens, whether your organisation needs to 
deduct tax from their salary or wages may depend 
on the operation of any applicable double tax 
treaty.'^' 

Your organisation should seek advice about 
payment of salaries or wages for international staff. 



7.3 What if your organisation lias 
questions on tax? 

Further information on deducting tax from 
employees' salary or wages can be obtained from 
the IRC (either at their service centres or their 
website). If your organisation has specific 
questions about its tax obligations, your 
organisation should seek professional advice. 

FURTHER INFORMATION 
Internal Revenue Commission 
(http://www.irc.gov.pg) 



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8 Misconduct and termination 
of employment 

Because of the serious consequences of ending 
an employee's employment or undertaking 
disciplinary action, there are strict requirements 
about how to do these things. 

This section only applies to full-time or part-time 
employees who have entered into employment 
contracts with your organisation. In relation to your 
organisation's other staff, the following table sets 
out termination requirements. 



Employee 


Termination 


Other 


tvoe 


riahts 


reauirements 








Casual 


Your organisation 


The employee 


employee 


or the employee 


must be paid a 




can end the 


full day's work 




employment 


on the day of 




without notice 


termination 
(except for a 
reason where 
notice is not 
required). 
Discrimination 
laws apply 


Piece-rate 


Your organisation 


Discrimination 


employee 


or the employee 
can end the 
employment 
without notice 


laws apply 


Volunteer 


Your organisation 


Discrimination 




or the volunteer 


laws apply 




may end the 






arrangement 






without notice 




Contractor 


Depends on the 


Discrimination 




contract 


laws apply 



8.1 How may your organisation terminate 
an employee?^^^ 

Giving notice 

Notice usually must be given before an 
employment contract can be terminated. Unless 
the employment contract has a different notice 
period, the minimum notice period your 
organisation must give the employee is as follows. 







Less than four weeks 


One day 


Four weeks to one year 


One week 


One year to five years 


Two weeks 


Five years or more 


Four weeks 



Circumstances where notice is not 
required 

However, your organisation does not need to 
provide notice if the employee has: 

■ seriously misbehaved or failed to perform their 
job properly (eg ignoring instructions, or 
continually failed to turn up to work without 
excuse); 

■ engaged in a serious crime (eg has been 
found guilty of fraud or dishonesty, is 
imprisoned for longer than a week, or has 
been convicted of breaching an employment 
law); or 

■ agreed that notice does not need to be 
provided. ^^^ 

If termination is being considered because of 
misbehaviour or a crime, it is important that your 
organisation follow the procedure set out below for 
dealing with misconduct. 

An employment contract may also allow your 
organisation to terminate an employee without 
notice, so long as your organisation pays the 
employee their wages for the notice period. 

If your organisation does not give the required 
notice, then your employee may have an action 
against your organisation for wrongful termination 
as a breach of employment contract. 

What happens on termination? 

On termination, your organisation should pay the 
employee up to the date of the termination if there 
is no notice period. If there is a notice period, your 
organisation should continue paying your 
employee normally until the notice period ends. 

On the employee's last day, your organisation 
should ensure that all property and confidential 
information held by the employee is returned to 
your organisation. 

8.2 What happens if your organisation fails 
to comply with these requirements? 

If a court finds that your organisation has not given 
the required notice, the court may require your 
organisation to pay the wages your employee 
would have earned during the required notice 
period, plus interest.^^^ 

For example, if your organisation terminates an 
employee without notice, when they should have 



Your People 



71 
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been given two weeks' notice, your organisation 
will need to pay the employee two weeks' pay 
(plus interest). 

If the employee is dismissed but the appropriate 
procedure for discipline is not followed, the 
employee is entitled to the amount of damages 
which is equal to the amount of pay they would 
have received during the time it would have taken 
to correctly follow the disciplinary procedure and 
then terminate their employment (plus interest). 

UNLAWFUL TERMINATION 
If your organisation unlawfully terminates an 
employment contract where the contract does not 
permit termination with notice, a court may require 
your organisation to pay the employee the wages 
they would have received for the entire remaining 
term of the contract or (if the contract does not 
have a term) a reasonable period. Your 
organisation should ensure that your employment 
contract sets out a process for termination and that 
this process (including any notice period) is 
followed 



218 



8.3 When can an employee terminate their 
employment?^^^ 

Notice periods 

An employee generally needs to give the same 
period of notice as the employer. However, an 
employee may terminate an employment contract 
without notice if your organisation or a member of 
your organisation: 

■ induced or misled the employee to entering 
into the employment contract; 

■ has failed to meet its obligations to the 
employee (eg by not providing a safe working 
environment); 

■ has been convicted of breaching an 
employment law relating to the employee; or 

■ agrees to the employee terminating their 
employment contract without notice. 

If an employee of your organisation quits without 
notice where they were not entitled to do so, it may 
be difficult to obtain any remedy, as a court is 
unlikely to require the employee to return to work 
for the notice period. 

Recouping expenses spent on an employee 

If your organisation has reimbursed its employee 
for certain expenses or paid certain expenses for 



the employee, which the employee incurred or 
undertook voluntarily, then your organisation may 
be able to recoup those expenses from the 
employee if the employee resigns shortly 
afterwards. 

However, your organisation may only do this if the 
employment contract or policies that form part of 
the contract specifically allow this. The repayment 
should only be for costs incurred a reasonable 
period of time before the employee was 
terminated. 

8.4 Dealing with misconduct and 
termination for misconduct 

Your organisation should be very careful when 
preparing disciplinary action against an employee 
(including when terminating an employee for 
misconduct). 

Your organisation should have a written policy 
dealing with misconduct. This should ensure that: 

■ all circumstances of alleged employee 
misconduct or poor performance are 
documented; 

■ except in exceptional circumstances, your 
organisation explains that disciplinary action is 
being considered and the particular reasons, 
including details of any allegations of 
misconduct or poor performance; 

- the employee is given a reasonable 
opportunity to respond to those reasons; 

■ your organisation considers what type of 
disciplinary action is appropriate. Termination 
may not always be proportionate to the 
misconduct. Other alternatives include issuing 
a written warning, demotion and moving the 
employee to different duties. This may avoid 
the need to dismiss the employee while still 
enforcing some discipline and showing that the 
organisation does not approve of the conduct 
of the employee. 

Gardening leave 

Although your organisation should give employees 
the opportunity to respond to allegations against 
them (except in exceptional circumstances) it may 
not be appropriate for the person to remain at work 
while disciplinary action is being investigated (for 
example, if there are claims of serious harassment 
or theft of your organisation's property). 
'Gardening leave' is undertaken where the 



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employee remains employed and paid as usual, 
however does not come into the office or 
undertake any duties. 

To enforce gardening leave your organisation 
should include a clause in its employment 
contracts allowing the organisation to require that 
employees go on gardening leave. 

Giving the employee the opportunity to 

RESIGN 

If your organisation has decided that the 
relationship with an employee should come to an 
end, it may choose to give an employee the 
opportunity to resign rather than terminating their 
employment. 

This may be beneficial for your organisation 
because it reduces the chance of the employer 
being found to have wrongfully dismissed the 
employee. The employee may prefer this option 
as well as they can tell future employers that they 
resigned, rather than being dismissed. 

8.5 Cultural and practical considerations in 
termination of employment 

Although the law sets out the rights, entitlements 
and obligations when an employee's employment 
is terminated, it is important that your organisation 
has regard to cultural and practical considerations 
in addition to its legal obligations. 

For example, in some situations the law allows for 
an employee to be terminated immediately without 
notice and without any pay or other benefits. 
However such an employee may consider that 
they should be given some money until they find a 
new job or receive some termination payment or 
other assistance, even where they do not have 
such an entitlement. The former employee may 
take action against their former employer where 
their expectations are not met. 

In order to avoid the possibility of litigation or other 
adverse action, your organisation might consider 
the following: 

■ paying the employee an amount of money for 
a period after employment to assist them 
during the time between jobs; 

■ if appropriate, offer to provide a reference or 
assistance with finding their next job (this is 
usually not appropriate where the employee 
has been terminated for misconduct); or 



- allowing them to keep some benefits for a 
short period after termination (for example, 
food or housing assistance). 

Regardless of the circumstances, in ending a 
relationship with an employee your organisation 
should be as understanding as possible, as this 
can cause significant hardship. 

RESOURCES 

Employment Act 1 978 '^ 

Superannuation (General Provisions) Act 2000 

Department of Labour and Employment Industrial 
Relations Act, Minimum Wages Board 
Determination No. 1 of 1992 

Employment of Non-Citizens Act 2007 and 
Employment of Non-Citizens Regulation 2008 

Industrial Safety, Health and Welfare Act 1961 

Workers Compensation Act 1978 

Income Tax Act 1959, Income Tax Regulation 
1959 



Your People 



73 
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Discrimination 



Certain conduct by organisations is 
prohibited as it can constitute unlawful 
discriminatory practices. 

What is discrimination? 

A discriminatory practice is treating someone 
better or worse than others because of a 
particular reason.^^° 

What grounds of discrimination are 
prohibited? 

Discrimination is prohibited on the grounds of 
colour, race, ethnicity, tribal or national origin, 
HIV/AIDS or sex in certain circumstances. 

What types of organisations are 
prohibited from discriminating? 

All organisations 

It is discrimination if an organisation treats 
someone worse than they treat another 
person because of one of the grounds above. 
This may occur in a number of ways including 
by deciding who to employ, who to offer 
services to, which contractors to engage, who 
to dismiss, or who to offer education or 
training to. 

It is discrimination if an organisations treats 
employees worse because they are female. 
Although this is only applicable to employees, 
as a matter of best practice your organisation 
should also comply with these obligations in 
relation to volunteers. 

Licence holders 

A general prohibition on discriminatory 
practices applies to organisations that are 
licence holders if there is a connection 
between the discriminatory practice and the 
organisation conducting its business. 

A licence includes permits or authorities to 
buy, sell, deal or trade in goods and licences 
under the Business Licences Act 1971.^^^ 



What types of similar conduct are 
prohibited? 

Acting, or encouraging someone to act, In 
an abusive or offensive manner 

If an organisation, through its employees or 
volunteers, acts in a threatening, abusive, 
insulting, provocative or offensive manner 
towards a person of a different colour, race, 
ethnicity, tribal origin or national origin,^^^ or if 
this behaviour is encouraged,^^"^ this may 
constitute discrimination. For this to constitute 
discrimination it must occur on licensed 
premises.^^^ 

Publishing offensive material or using 
abusive or offensive words In a public 
place 

If your organisation publishes material, or 
uses words in any public place, that are 
threatening, abusive, insulting, provocative or 
offensive, this may also be discrimination. 

This will constitute discrimination if it is done 
with the intent to stir up hatred, ridicule or 
contempt against a section of the public 
distinguished by colour, race or ethnic, tribal 
or national origin, and is likely to do so.^^® 

What are the consequences of 
discriminating? 

If your organisation discriminates against 
someone, this could have a negative effect on 
your organisation's reputation. 

Your organisation may also break the law if it 
engages in any discriminatory practices. If an 
employee or volunteer act in this way during 
their duties with your organisation, your 
organisation may be legally responsible. 

Consequences for breaking a discrimination 
law include fines, loss of government licenses 
and imprisonment. 



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1 What is unlawful 
discrimination? 

Whilst there are some general prohibitions on 
discrimination, other conduct by organisations will 
only constitute discrimination if engaged in by 
certain types of organisations in specified 
circumstances. 

Despite this it is important for your organisation to 
ensure that its operations comply with the 
prohibitions as a matter of best practice. 

1.1 What types of conduct are prohibited 
for all organisations? 

Publishing offensive material or using 
offensive words in a public place 

If your organisation publishes material, or uses 
words in any public place, that are threatening, 
abusive, insulting, provocative or offensive, this 
may be discrimination 



227 



This will be discrimination if it is done with the 
intent to stir up hatred, ridicule or contempt against 
a section of the public distinguished by colour, race 
or ethnic, tribal or national origin, and is likely to do 



so 



228 



As a workplace may be a public place, it is 
important that your organisation's employees are 
prohibited from behaving offensively. 

Discrimination on the basis of HIV/AIDS 

Your organisation must not discriminate against 
someone to their detriment, or harass someone, 
because they are infected or affected by 
HIV/AIDS.^^^ This may occur by deciding who to 
employ, who to offer services to, which contractors 
to engage, who to dismiss, or who to offer 
education or training to 



230 



It is also unlawful for your organisation to 
stigmatise a person because they are infected or 
affected by HIV/AIDS. ^^^ 'Stigmatise' means to 
vilify, or to incite hatred, ridicule or contempt 
against a person by distributing to the public or 
communicating to the public anything that is 
threatening, abusive, degrading, provocative or 
offensive. ^^^ 

Discrimination against women in relation 
to employment 

Your organisation, as an employer, must not 
discriminate against a woman on account of her 



sex, or pay a female employee lower wages than a 
male employee employed at the same level. ^^^ 

This means that in hiring, dealing with, paying, 
promoting and terminating employees, people 
cannot be treated differently on the basis on their 
sex. As a matter of best practice your organisation 
should comply with this prohibition for volunteers. 

Harassment (including verbal, sexual and physical 
harassment) of women in the workplace is a 
common problem; however it is against the law 
and must not be permitted in your organisation. In 
many organisations harassment of women can 
result in immediate dismissal. Codes of Conduct 
and other policies on behaviour should require that 
employees not harass women. 

1.2 What types of conduct are prohibited 
for organisations that hold licences? 

a general prohibition on discriminatory practices 
applies to organisations that hold a licence. ^^"^ A 
'licence' includes permits or authorities to buy, sell, 
deal or trade in goods and business licenses under 
the Business Licences Act 1 971 .^^^ If your 
organisation holds a licence it should not engage 
in or allow any discriminatory practices against 
anyone in relation to conducting its business. 

'Discriminatory practice' means treating someone 
better or worse because of their colour, race or 
ethnic, tribal or national origin. ^^^ In particular a 
discriminatory practice may be engaged in by 
deciding who to provide services to or by dealing 
with different classes of people on different terms. 

To be prohibited, the discriminatory practice must 
occur in connection with the business that the 
licence is for. A practice may also be prohibited if 
it is related to the use of any business or licensed 



premises, vessels, aircraft or vehicles 



237 



1.3 What types of conduct are prohibited 
on licensed premises? 

Your organisation may also engage in 
discrimination if it, through its employees or 
volunteers, acts in a threatening, abusive, 
insulting, provocative or offensive manner towards 
a person of a different colour, race, ethnicity, tribal 
origin or national origin^^^ - or if this behaviour is 
encouraged. ^^® 

Engaging in such behaviour will constitute an 
offence if it occurs on premises that a licence 
applies to. 



Your People 



75 
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2 Avoiding unlawful 
discrimination 

It is a good idea for your organisation to adopt an 
anti-discrimination policy. The policy: 

• sets out your organisation's commitment 
to not engage in discriminatory behaviour; 
and 

• may set out standards that employees and 
volunteers are expected to follow during 
their time with your organisation. 

If your organisation's people engage in 
discrimination or harassment, it is important that 
your organisation takes this seriously and 
commences disciplinary action against those 
employees. Otherwise your organisation may be 
seen to support their actions. 



3 What are the consequences 
of unlawful discrimination? 

if your organisation engages in discriminatory 
conduct, this could have a negative effect on your 
organisation's reputation. 

Your organisation may also break the law if it 
engages in discrimination. If an employee or 
volunteer act in this way during their duties with 
your organisation, your organisation may be held 
to be legally responsible. 

A summary of the consequences of breaching 
discrimination laws is set out in Figure 4 below. 



FIGURE 4: POTENTIAL PENALTIES FOR BREACHING ANTI- DISCRIMINATION LAWS 







lovernment licendB^^H 




li 




olders or persons on 


2™^r^™""^"° AH organisations 


1 












Discriminatory 
practices in relation 
to licences^"*" 


A fine of up to K200.00''' 
and licence may be 
suspended, cancelled or 
disqualified^'*^ 


N/A 


N/A 


Abusive or offensive 
behaviour against 
someone of a 
different colour, race 
or origin 


Imprisonment of up to two 
months^"*^ and licence 
may be suspended, 
cancelled or 
disqualified^'*'* 


N/A (unless on licensed 
property) 


N/A (unless on licensed 
property) 


Publication or use of 
public place to stir up 
hatred, ridicule or 
contempt of a section 
of the public 


A fine of up to K2, 000.00 
and/or imprisonment for 
two years^'*^ and licence 
may be suspended, 
cancelled or 
disqualified''^ 


A fine of up to K2,000.00 
and/or imprisonment for 
up to two years''*'' 


A fine of up to K2,000.00 
and/or imprisonment for 
up to two years''*® 


Discrimination 
against someone with 
HIV 


For corporations - a fine 
of uptoK10,000.00''^ 


For corporations - a fine of 
up to K1 0,000.00'^° 


For corporations - a fine 
of up to K1 0,000.00'^* 


Discrimination 
against a woman in 
employment 


N/A 


A fine of up to K200.00'^' 


N/A 



RESOURCES 

Discriminatory Practices Act 1963 

HIV/AIDS Management and Prevention Act 2003 



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76 
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3. Your property 

Leasing land and premises 

If your organisation wishes to have a permanent premises (for example, for an office), it 
will need to obtain the use of land or premises. 

As it is usually not possibly to buy land In PNG, the principal way your organisation can 
obtain the use of land or premises is through obtaining a lease. A lease is a special kind 
of contract. 

This chapter sets out how your organisation can obtain the use of land or premises with a 
lease, what your organisation should expect to find in a lease, and managing issues 
related to using land and premises. 



PERSONAL PROPERTY SECURITY REFORM 

The Personal Property Security Act 2011 has been passed by the PNG parliament. As at the time of 

publication, the Act had not yet entered into force. The Act is therefore not covered in this handbook. 

The Act will set up a register of interests over personal property (ie, goods and property other than land). 
This may be relevant to your organisation if it has a legal interest in personal property, for example: 

-> some of your organisation's personal property is given to other people, but your organisation keeps 
ownership of the property (eg, the property is borrowed or leased); or 

-> your organisation sells personal property to other people, and gives them the property before they have 
fully paid, but your organisation wishes to retain actual ownership until full payment is received. 

If your organisation has questions about the Act, your organisation should seek legal advice. 



Your Property 78 

© King & Wood Mallesons 



1 Leasing Property 



253 



As it is usually not possibly to buy land in PNG, 
the principal way your organisation can obtain the 
use of land or premises is through obtaining a 
lease. A lease is a special kind of contract that 
grants a person the right to exclusively occupy 
land (or premises on land) for a certain period - 
usually in return for rent. 

LEASE TERMINOLOGY 

The party who is takes on the lease and pays rent 

is the 'tenant or 'lessee'. 

The party who gives the lease and receives the 
rent is the 'landlord or 'lessor'. 

1.1 Identifying appropriate property 

if your organisation wants to enter into a lease, the 
first step is to identify land or premises for lease 
that would be appropriate for your organisation's 
needs. Your organisation should keep in mind 
that: 

■ for government-owned land, the land available 
for leasing will be advertised in the National 
Gazette; 

■ in urban areas, land may be divided into 
particular zones (eg, 'residential zones' or 
'commercial zones'), where land can only be 
used for particular purposes. In identifying 
urban land that meets your organisation's 
needs, your organisation should ensure the 
land is in an appropriate zone; and 

■ your organisation should ensure that the 
utilities it requires (eg, water, sewerage and 
power) are connected or able to be connected 
easily. 

1 .2 Types of leases 

The process for obtaining a suitable lease then 
depends on who owns the land or premises your 
organisation wants to acquire: 

■ if the government owns the land, the lease will 
be a 'state lease'; 

■ if the land is customary land, the lease must be 
from an incorporated land group or a 
customary land group; and 

■ if the land is already leased, a sub-lease from 
the lessee will be needed. 



Each of these options is set out below. A sub-lease 
is likely to be the main option for an organisation 
wishing to lease land or premises. 

1 .2 State leases 

A 'state lease' is a long term lease (generally not 
exceeding 99 years) granted by the State (that is, 
the government) over government land. There are 
several types of 'state leases' that the Government 
can grant. The nature of your organisation and the 
purpose for which the land is needed will 
determine the type of lease you should apply for. 
The most relevant types of leases for your 
organisation may be business leases, ^^"^ urban 
development leases, ^^^ special purpose leases^^® 
or mission leases. ^^^ 

A state lease may be dealt with (subject to the 
provisions of the Land Act) in any manner 
applicable to any other form of lease. This includes 
transferring or subleasing it.^^® 

Obtaining a state lease can be a long and difficult 
process, and is unlikely to be an effective option 
for an organisation wishing to lease land. 

1.3 Leases of customary land 

Customary land can only be leased in accordance 
with custom. ^^^ However, in practice this is rarely 
done and can be difficult. This is unlikely to be a 
useful option for an organisation to pursue. 



Your Property 



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1.4 Sub-leases 

A sub-lease is a lease which is granted by a lessee 
rather than the owner of the land directly. It 
operates the same way as a normal lease, sub- 
lease just being a legal description indicating that 
the land is also subject to a head lease. 



Lease 



Sub-Lease 



Owner 



Lessee 



Sub-Lessee 



A sub-lease can generally be negotiated between 
your organisation (as the sub-lessee) and the 
lessee. However it is important to confirm that the 
lessee has the legal rights to enter the sub-lease. 

For example, your organisation should confirm 
that: 

■ the head lease allows the lessee to sub-lease; 
and 

■ the lessee is only granting your organisation 
rights that it has as lessee. For example, a 
sub-lease cannot have a duration longer than 
the term of the head lease. 

To be valid, a sub-lease of a State lease must be 
approved by the Minister responsible for land. 



2 Entering into leases 

2.1 Formalities 

There are several formalities that your organisation 
should consider when entering into a lease. 

• Writing: As a general rule, a lease should 
be in writing. ^^° While there are some 
exceptions to this rule, a lease is an 
important legal contract and it is advisable 
that it is put in writing. Having a lease in 
writing provides a record of the agreement 
between the parties, which can help to 
resolve disputes about each party's rights. 

• Registration: If your lease is for longer 
than 3 years, it must be registered. To 
register a lease your organisation must 
complete the required form and lodge it for 
registration with the Registrar of Titles. ^^^ 

While leases for terms less than three 
years are not required to be registered, 
they may be registered if they are in 



writing 



262 



Registering a lease is generally a good 
idea, because it can strengthen your 
organisation's position if another person 
disputes the lease or your organisation's 
rights under the lease. ^^^ A registered 
lease can also be used as security to 
obtain secured finance in some 
circumstances. 

iUlinisterial approval: As described 
above, a state lease generally cannot be 
granted without the approval of the 
Minister 



264 



Stamp duty: Leases generally attract 
stamp duty (and potentially other taxes), 
depending on your organisation's 



circumstances 



265 



2.2 Terms of a lease 

If your organisation enters a state lease, it will 
generally not be able to negotiate the terms of a 
state lease (except by setting these out in your 
organisation's application). 

Because a lease is a contract, the parties to a sub- 
lease or lease of customary land can agree any 
terms they wish (provided that the terms of a sub- 
lease are consistent with the head lease and with 
any planning laws). 



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80 

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Where your organisation is entering a lease, some 
key terms that your organisation should carefully 
review are as follows. 

1 Term: How long the lease is valid for, including 
any options to renew the lease. 

2 Rent: The rent payable under the lease, 
including how much and how often. A state 
lease will generally set rent at 5% of the 
unimproved value of the land, reviewed every 
10 years - but the Minister may set a different 
rate. 

3 Bond: Tenants usually need to pay an upfront 
amount, called a bond, to cover any damage 
the tenant may cause over the course of the 
lease and any outstanding rent. 

4 Rent review: How the rent that your 
organisation pays is reviewed. That is, when 
and under what circumstances the landlord 
can increase your rent. As a tenant, your 
organisation may want to ensure the landlord 
can only increase the rent by a certain amount, 
or that your organisation has the right to exit 
the lease if the rent is unfairly increased. 

5 Outgoings: The outgoings and any other 
moneys your organisation needs to pay (for 
example, for water or electricity). Your 
organisation should check how much these 
outgoings are and how often they need to be 
paid. In some leases, the landlord may pay for 
certain outgoings. 

6 Permitted use: What your organisation is 
allowed to do with the premises and what your 
organisation is prohibited from doing. 

7 Improvement covenants: What 
improvements your organisation must make 
under the lease to the land or to the premises. 
Under a state lease, a lessee is required to 
maintain any improvements on the land in 
good condition. 

8 Default and termination: Under what 
circumstances the landlord can end the lease 
and take back the premises, and what rights 
your organisation has to terminate the lease. 

9 Sub-lease and assignment: Your 
organisation's rights (if any) to assign or sub- 
lease the lease. 

In addition, some terms are implied into a lease 
even if they are not in the written contract. 
Examples of these terms are as follows. 



1 Eviction: Except in relation to customary land, 
the landlord can require the lessee to leave the 
premises when the lease ends or a certain 
amount of rent is unpaid (eg 10 days rent if the 
tenancy is for a one week term, 21 days rent if 
the tenancy is for one month, 30 days if the 
tenancy is for three months and 42 days if the 
tenancy is for a longer period).^®® The landlord 
and lessee can also agree other 
circumstances when the lessee can be 
required to leave. 

2 Condition of premises: The lessee must 
keep the premises in as close to the same 
condition as at the start of the lease (except for 
any fair wear and tear). 

3 Payment of rent: The lessee must pay rent as 
it falls due. 

4 Quiet enjoyment and inspection rights: The 

lessor is not to interfere with the lessee's 
enjoyment of the land (so the lessor cannot 
enter onto the land at any time it chooses). 
However, the lessor can enter the premises at 
all reasonable times for certain purposes, such 
as for inspection or repair. 

2.3 Before signing a lease 

Before signing a lease, your organisation should 
investigate what upfront costs (if any) will be 
payable when your organisation signs the lease, 
and make sure that that it can afford to pay those 
costs. Depending on the agreement, your 
organisation may have to pay: 

■ to obtain Ministerial approval; 

■ to register the lease; or 

■ for stamp duty on the lease. 

Make sure your organisation reads, understands 
and has a copy of the lease before your 
organisation signs the agreement or moves in. 
Leases are important legal documents. If there is 
any term your organisation does not understand, 
your organisation should seek legal advice. 

2.4 Moving in and preparing a 'condition 
report' 

All lessees must keep their leased premises in 
'good state and repair'. This means at the end of 
the term, your organisation must give the premises 
back to in as near as possible the same condition 
they were at the start of the lease (except for any 
fair wear and tear). 



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Because of this obligation, it is a good idea for your 
organisation to complete a condition report. A 
condition report is a written record of the condition 
of the premises when your organisation first moved 
in. To prepare a condition report your organisation 
should: 

■ list anything about the premises which is 
damaged or not working; 

■ date and sign the report; and 

■ if possible, have the landlord sign the report to 
acknowledge the state of the premises - or at 
least send a copy to the landlord for their 
records. 

Your organisation should make the report is 
completed as soon as possible after you move in. 

2.5 Paying rent 

You and your landlord should agree on the rent 
that you will pay and the method of payment 
before you move in. Make sure these 
arrangements are included in the lease. It is a 
good idea to make sure your landlord gives you a 
receipt for each rental payment. 



3 Dealing with leases 

3.1 Disputes with the landlord 

The best way to avoid lease disputes is to make 
sure each party's rights and obligations are agreed 
in writing. This includes the original lease and any 
other agreements about the property. Your 
organisation and the landlord should both keep a 
copy of any such agreements. 

During any dispute, your organisation must 
continue to pay rent. Failure to pay rent often 
gives your landlord the right to terminate and 
reoccupy the premises - leaving your organisation 
without any premises. 

If the dispute is serious, seek legal advice as to 
how to best resolve it. 

3.2 Transferring a lease 

A transfer or an assignment of a lease is an 
agreement to transfer the lease to someone else 
so they assume the obligations under the lease for 
the rest of its term. For example, your organisation 
may no longer require the use of a property before 
the lease expires and may want to pass the lease 
onto someone else to avoid having to pay rent for 
the rest of the lease term. 

Where land subject to a lease is intended to be 
transferred or assigned, the owner of the land must 
agree to the transfer using the appropriate form, 
which can be obtained from the Department of 
Lands and Physical Planning. Your organisation 
should ensure the owner of the land agrees to 
release your organisation from any obligations 
going forward, so that on registration of the 
transfer: 

■ your organisation will no longer have rights or 
obligations as a tenant going fonward; and 

■ those rights and obligations will pass to the 



new tenant 



267 



Stamp duty is payable on a transfer of a lease. It 
is important to consider this when transferring a 
lease, and to think about which party is to pay the 
stamp duty. Typically the transferee (the person to 
whom the lease is transferred) pays any stamp 
duty. 

For state leases, unless the Minister has given 
approval, a lessee can only transfer a state lease 
once the conditions of the state lease have been 
fulfilled.^^^ 



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3.3 Ending a lease 

Generally, the term of your lease is pre-determined 
before you move in. Once the term expires (and 
there are no options to renew) the lease will 
automatically terminate. 

The other ways in which a lease may be ended 
before the expiry of its term include by: 

■ assigning the lease to someone else (if the 
lease permits it); 

■ surrendering the lease back to the landlord (if 
the landlord agrees); or 

■ transferring the lease by following the 
procedure set out in the relevant legislation. ^^^ 

If your organisation attempts to end its lease 
before the end of its term in a way that is not 
permitted under the lease, your organisation may 
be in breach of your lease and be liable to pay 
damages. 



RESOURCES 
Land Act 1 996 

Land Registration Act 1981 

Land Registration Amendment Act 2009 

Physical Planning Act 1989 



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Intellectual Property 



Your organisation may have a unique name, logos, slogans, publications, a website and its 
own ideas. These comprise your organisation's intellectual property - or 'IP' - and are 
important and valuable assets to your organisation. 

Protecting IP is important so that: 

• your organisation can keep control of how its IP is used; 

• your organisation's 'brand name' and reputation is protected, so other people or 
organisations do not use them without your organisation's approval; and 

• the investment your organisation has made in its publications and materials is 
respected. 

This section contains an overview of the four main categories of IP (copyright, trademarks, 
patents and industrial designs) as well as business name registration, and provides some 
guidelines on how to protect your IP and use other people's IP. 



What is "Intellectual property"? 

Intellectual property refers to creations of the mind: 

inventions, literary and artistic works, symbols, names and images used 
in business. 

What are "Intellectual property rights"? 

Intellectual property rights are like any other property right. They allow 
creators, or owners, of patents, trademarks or copyrighted works to 
benefit from their own work or investment in a creation. ^^° 



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1 Overview of IP 

There are four main categories of IP, summarised 
as follows. 



FIGURE 1 : KEY TYPES OF IP 



2 Copyright 





_-^, . - - 




I 


■ 
What is it? Examples 










Copyright 


The expression 
of ideas, such as 

through literary 
and artistic works 


Articles, novels, 

movies, music, 

paintings 


Trade 
marks 


What your 

organisation 

uses to identify 

itself to the public 


Logos, symbols, 

marks, phrases, 

brand names 


Patents 


Original 
inventions 


Cars, medicines, 
machines 


Industrial 
Designs 


Aesthetics of an 

article (how it 

looks) 


Patterns, 

shapes, 

furniture, 

jewellery, office 

equipment 



Your organisation's copyright is automatically 
protected provided it meets the requirements of 
PNG copyright law. However, trademarks, patents 
and designs must be registered to be protected. 
The Intellectual Property Office of Papua New 
Guinea (IPO) is responsible for promoting and 
protecting copyright, trademarks, patents and 
industrial designs and holds the registers for each 
type of IP. Your organisation's business name can 
also be separately registered and protected. 

Finally, your organisation may also want to share 
its IP with another organisation, or use another 
organisation's IP. It is important that your 
organisation has an appropriate agreement to do 
both of these things. 



When a person creates an original work, the work 
automatically has copyright protection. Copyright 
protection gives the owner the exclusive right to 
use, and authorise the use of, the work, subject to 
some exceptions. 

2.1 What does copyright protect? 

If a person writes or creates an original work (for 
example, an article, book, advertisement, 
computer program, song, painting, photo or film), 
that person will hold copyright in that work. This 
means that for as long as the copyright lasts, your 
organisation is protected against anyone trying to 
use or copy that material without your 
organisation's permission. 

Copyright in PNG protects original works in 
material form. It does not protect ideas, 
processes, procedures, systems, concepts, 
discoveries or official texts 



271 



A person who writes or creates an original work 
also has 'moral rights' in the work. Moral rights are 
separate to copyright and entitle the author of the 
work to be acknowledged as the person who 
created it. 

2.2 How can your organisation ensure it 
has copyright in worlds created on its 
behalf? 

The general position is that an employer owns the 
copyright in any works created by its employees as 
part of their employment. However, to avoid any 
doubt, your organisation should expressly specify 
this in its employment contracts. 

For volunteers or contractors, it is even more 
important that your organisation makes sure that 
people who create material as part of their work for 
your organisation assign the copyright to your 
organisation. 

Clauses assigning copyright should be included in 
agreements signed by employees, volunteers and 
contractors. These clauses should also deal with 
transferring or waiving moral rights (so that your 
organisation does not need to include the name of 
each person who contributed to the work and can 
modify the work without each contributor's 
permission). 

See the part below on 'Protecting IP' and also the 
Employment section. 



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2.3 What rights does the copyright holder 
have? 

Owners of copyright in a particular work have the 
following rights:^^^ 

■ the right to reproduce, distribute, broadcast or 
translate the work; 

■ the right to charge anyone else a fee to 
reproduce, distribute, broadcast or translate 
the work; 

■ the right to sell or assign their copyright; and 

- moral rights to have their name attached to the 
work and to object to any modification or 
distortion of their work. 

Copyright usually lasts for 50 years after the death 
of the person who created the work. For a 
collective or anonymous work (including a work 
where copyright is owned by an organisation), 
copyright usually lasts 50 years from the date the 
work was first made or made available to the 
public (whichever occurs later) 



273 



Moral rights do not expire with copyright and may 
continue even if a person loses copyright in a 
work. Moral rights may be transferred separately 
to copyright or may be waived in writing. ^^"^ 

2.4 Are there any exceptions to these 
rights? 

In some circumstances, reproduction of another 
person's copyrighted works is permitted. ^^^ These 
circumstances include reproduction: 

- for exclusively private purposes; 

■ by public institutions, such as public libraries; 

■ for teaching purposes; 

■ on works on current economic, political or 
religious topics, or current events; and 

■ during digital transmission of a work. 

In addition, a neighbouring right work can be 
reproduced for reporting current events, scientific 
research, and for teaching activities. ^^® 

2.5 Sharing copyrighted material 

Your organisation may want to allow another 
person to use your organisation's copyrighted 
material (for example, allowing another 
organisation to publish your brochures). Similarly, 
your organisation may want to use the copyrighted 
materials of another organisation. In either case. 



use of copyrighted materials should be authorised 
and governed by a written agreement. 

If your organisation is entering into an agreement 
to use or authorise the use of copyrighted 
materials, it should consider the following issues 
and make sure they are addressed in the 
agreement. 

1 Scope: Make sure the scope of the use of the 
copyright material is appropriate. For example, 
your organisation may wish to limit the scope 
to a certain geographic area, specified 
materials or a specific event. 

2 Exclusivity: Is the right to use the material 
exclusive or non-exclusive - that is, can the 
copyright owner also allow other people to use 
the copyrighted material? 

3 Sub-licensing: If your organisation is the 
owner of the copyright, it may be preferable to 
state in the contract that the person authorised 
to use the copyrighted material cannot assign 
this right to another person, or can only do so 
in certain circumstances (for example, if your 
organisation consents). 

4 Permitted Use/Restrictions: It is typical to 
include provisions regarding the use of the 
copyrighted materials - for example, only 
using the materials as directed by the owner, 
including '©' whenever it is used and using the 
copyrighted material in accordance with the 
reputation of the owner. A copyright owner 
may also want to approve any 
samples/materials using the material before 
they can be used. 

5 Inspection: The agreement might also set out 
whether the copyright owner has a right to 
inspect all materials using the copyrighted 
material, and whether the person authorised to 
use the copyrighted material must keep 
records about how the materials are used. 

6 Enforcement: What happens if a person takes 
action against the person authorised to use the 
copyright on the basis of the use of the 
material, or the copyright is infringed by 
another person? Which party has control of 
the dispute? Does the person authorised to 
use the copyrighted material need to give 
assistance to the copyright owner? 

7 Termination: What rights do each party have 
to terminate the agreement, and does the 
licence terminate automatically in certain 
circumstances (for example, if the copyright 



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expires or if a party is wound up)? Winat 
happens on termination -must tine person 
autinorised to use tine copyrigint material stop 
using the material immediately? 

An agreement is only legally binding if both parties 
are giving up something. So the agreement should 
include payment by the organisation who is being 
given rights to use the material (even if this is only 
a nominal amount, such as K1) or should be 
reciprocal (eg with both organisations allowing the 
use of each other's material). Otherwise, your 
organisation should use a Deed. See the 
Contracts section for more detail on deeds and 
agreements. 



3 Trade marks 

A trade mark is a 'badge of origin' to distinguish a 
person or organisation's goods and services from 
those of another organisation. Registering a trade 
mark gives your organisation exclusive use, or use 
with limitations, of that trade mark. 

Registering a trade mark also protects the 
reputation of your organisation by preventing 
others from using your organisation's trade mark 
(which may give the impression that their business 
or organisation is related to or has the approval or 
authorisation of your organisation). 

3.1 What can be registered as a trade 
mark? 

A trade mark can be registered in Part A of the 
trade mark register if it is distinctive. A trade mark 
which is non-distinctive, but is capable of 
becoming distinctive overtime, can be registered 
in Part B of the Register. ^^^ 

A trade mark is distinctive if it is adapted to 
distinguish other goods or services. ^^® A trade 
mark is not distinctive it is merely a description of 
the character of quality or goods, a geographical 
name or a surname. 

An application may be refused if there is an 
existing registered mark that is too similar. The 
register of trademarks can be searched in person 
at the IPO. 

A trade mark can be registered for any or all of the 
goods in a particular class, such as clothing, or 
education and entertainment. ^^^ A trade mark 
cannot be registered generally for all classes of 
goods and services. 



3.2 How can your organisation register a 
trade mark? 

The key steps in registering a trade mark are set 
out in Figure 2 on the following page. 



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FIGURE 2: REGISTERING A TRADE MARK 



1. Application 


Your organisation must make 
an application to the IPO. 
An application form must be 
completed and submitted with 
at least eight representations of 
the trade mark, measuring 80 
mm X 60 mm (with one of these 
to be affixed to the application 
itself).^«° 

There is an application fee of 
K250.00.^®^ 


2. Acceptance 


After a trade mark has been 
accepted by the Registrar, the 
trade mark will be published in 
the Trade Mark Journal. 


3. Opposition 


For a period of three months, 
the registration of the trade 
mark may be opposed. If no 
opposition is lodged, the 
application will proceed to 
registration. 


4. Registration 


After lodgement of an 
application, registration 
generally takes 6 months. ^^^ 
If the application is successful, 
the registration fee of K350.00 
must be paid within 6 months 
of acceptance. ^®^ 
A trade mark is registered for 
an initial period of 1 years, 
with the ability to renew that 
registration. 



The registration of a business name does not 
amount to a registration of a trade mark. A 
business can trade in its own name even if this 
happens to be the registered trade mark of another 
business.^®'' For this reason, it is advisable to 
register both a business name and a trade mark if 
possible (see the part below 'Business Names'). 

3.3 What rights does registration give your 
organisation? 

Once registered, the owner has exclusive use of 
that mark in relation to the goods or services for 
which it is registered 



285 



Registration of a trade mark generally only protects 
that trade mark in PNG. It is advisable to register 
a trade mark in other countries where trade mark 
infringements may be a concern. 



3.4 What happens if your organisation 
does not use its trade mark? 

If your trade mark is not used for three years, a 
person can apply to the National Court to have it 
removed from the register 



286 



3.5 What if someone uses your 
organisation's trade mark? 

A registered trade mark is infringed if another 
person uses a mark which is substantially identical 
with or deceptively similar to the trade mark, in 
relation to the goods or services to which the trade 
mark is registered. ^^^ 
CASE EXAMPLE: RAMU SUGAR 
In 2009, RH Trading's trade mark 'Fine Sugar' was 
found to be deceptively similar to the registered 
trade mark for 'Ramu Sugar' and therefore 
infringed that trade mark. The Fine Sugar 
products were found to be very similar in their 
general packaging and design, and could easily be 
confused with the Ramu Sugar product by the 
public 



288 



However, there will be no trade mark infringement 
in certain circumstances, such as when it is used 
in good faith and is a person's or a business's own 
name, or it is only used to describe goods or 



services 



289 



There are also penalties for forging or falsely 
applying a trade mark to goods, or selling or 
knowingly importing goods to which a forged trade 
mark applies. 

3.6 Can your organisation enforce its 
rights without registration? 

Even if a trade mark is not registered, it may be 
possible to prevent someone using it under the 
common law action of 'passing off. 

To be protected as a common law trade mark 
(rather than a registered trade mark), the goods or 
services must have established a reputation or 
goodwill and be known by a distinguishing feature. 
If another person misrepresents their goods or 
services as the goods or services protected by the 
common law trade mark, and the owner of the 
protected trade mark suffers damage as a result, 
then that person can be taken to court to recover 

4.N,„ i„„„ 290 

the loss. 



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However, 'passing off is generally more difficult to 
prove than a registered trade mark infringement. A 
registered trade mark avoids the need to prove 
reputation or goodwill. It is therefore advisable to 
register a trade mark. 

3.7 Sharing trade marks 

From time to time, your organisation might want to: 

■ allow others to use its trademarks; or 

■ use the trademarks of others. 

This is usually for a specific purpose or period of 
time, for example to use a trade mark in relation to 
an event or a project. It is referred to as 'licensing' 
a trade mark. 

If your organisation is entering into a licence for a 
trade mark, it should consider the same issues that 
are listed above for copyright agreements and 
make sure they are addressed in the licensing 
contract. 



TRADE MARK LICENSING 






A licensing 


contract is between a 


Licensor 


and a 


Licensee. 








Licensor - 


the owner of the trade 


mark 




Licensee - 


■ the person wishing to 


use the trade 


mark 









Generally speaking, if your organisation is the 
owner of the trade mark, it will be preferable to 
restrict the licensee's use of the trade mark and 
retain as much control as possible over how the 
trade mark is used. If your organisation is the 
licensee of the trade mark, it will be preferable to 
seek less restricted use of the trade mark. 

It is important to keep in mind that the licence will 
only be legally binding if both sides have given 
something to each other in the agreement. The 
organisation obtaining the licence could, for 
example, give the licensor a nominal fee (eg K1) or 
authorise use of some of its material. If the 
organisation obtaining the licence is not providing 
any rights to the licensee, then the licence should 
be granted in the form of a Deed. See the 
'Contracts' section for more detail on deeds and 
agreements. 



4 Patents 

A patent gives the owner an exclusive right to 
commercially make, use, distribute and sell an 
invention. A patent will generally last for 20 years 
and is granted by the IPO through a patent 
application process. 

4.1 What inventions can be patented? 

An invention is a product or a process that 
provides a new way of doing something, or offers a 
new technical solution to a problem. The invention 
must be of practical use, show a new 
characteristic, and involve an 'inventive step' 



291 



4.2 How do you register a patent? 

The Registry of Patents and Industrial Designs 
grants patents and registers industrial designs. In 
practice, all registrations are handled by the IPO. 
Protection of a patent can be granted in more than 
one country. 

A patent application must be made in the required 

292 

form and contain detailed information about the 
invention. A patent application is quite technical 
and often specific assistance is required to prepare 
the application properly. An application fee is 
required 



293 



The application will be examined to confirm that it 
complies with the requirements for a valid patent, 
including that there is no existing similar patent. 
This process will include an ongoing dialogue 
between the IPO and the applicant. Once the IPO 
accepts the patent, the patent will be published 
publicly. The date of grant of the patent is the date 

294 

on which it is published. A registration fee of 
K100 is payable by the applicant. Note that it is 
possible for an objection to be made against the 
registration of a patent. 

It is important to keep the invention confidential 
until the patent has been granted. If information 
about the invention becomes known, it may not 
qualify as 'new' and therefore may not able to be 
patented. 



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5 Industrial Designs 

A registered industrial design protects tine visual 
aspects of an article, and gives the owner an 
exclusive right against unauthorised copying or 
imitation of the design 



295 



5.1 What is an industrial design? 

Industrial design is about the aesthetics (that is, 
the appearance), rather than the function, of an 
article. To be protected, the design must be 
visually appealing and 'new' or 'original'. 

A design may be two dimensional, such as 
patterns and lines, or it may be three dimensional, 
such as shape or surface texture. Industrial 
designs can be applied to a wide variety of objects, 
such as jewellery or furniture. 

5.2 How is a design registered? 

An application for a design is lodged with the 
Registry of Patents and Industrial Designs (in 
practice, the IPO) with the applicable fee.^®^ To be 
registered, the design must not have been 
disclosed to the public in any way.^^'' The 
application will be checked by the IPO for 
compliance with the formal requirements for 
registration, including that it is not too similar to 
any existing registered designs. If the IPO accepts 
and registers the design, it will be publicly 
published and a certificate of registration issued to 
the applicant. A registration fee of K100 is 
payable. It is possible for persons to object to the 
registration of a design. 

A registered design is protected for 5 years, but 
may be renewed for up to 1 5 years. 

5.3 What rights does registration give my 
organisation? 

The owner of a registered industrial design has the 
exclusive right to exploit the design. In addition, it 
gives the owner an exclusive right against 
unauthorized copying or imitation of the design 

If a person was not aware that a design was 
registered, it is not an infringement to use the 
registered design 



298 



299 



The IPO advises that currently the registration of 
an industrial design will only provide protection 
within Papua New Guinea, and not worldwide. 



6 Protecting your IP 

6.1 What if someone uses your 
organisation's IP without permission? 

If someone uses your organisation's IP without 
permission, it is possible that they have infringed 
your organisation's IP rights. 

It is up to your organisation to take steps to 
enforce your rights against IP infringers. Your 
organisation should gather as much information 
about the infringement as possible and seek legal 
advice. The law may prevent your organisation 
from commencing an action in court if the IP 
infringement occurred more than 6 years before 
the action was commenced 



300 



6.2 How can your organisation obtain and 
protect its IP rights? 

1 Make sure that your organisation has the 
capacity to own IP 

Only an individual or a 'legal person' can 
register a trade mark, design or patent. This 
means that your organisation must be 
incorporated to legally own IP in its own name 
(otherwise any IP will be owned by the 
individuals who created it). Your organisation 
should ensure that anyone who creates IP for 
your organisation agrees to transfer that IP to 
your organisation. For example, as mentioned 
above, your organisation should include IP 
clauses in its employment contracts, and 
ensure any volunteers also sign agreements to 
protect your organisation's IP. IP clauses 
should also be included in agreements with 
your organisation's contractors. 

If your organisation does not own IP in 
materials created by its people, the material 
produced by your organisation will still have IP 
rights attached but these will belong to the 
people who created the material (for example, 
it could belong to employees, contractors or 
volunteers). This will make it difficult for your 
organisation to control how the IP is used. 

2 Register any trademarks used by, or 
patents or designs created by, your 
organisation 

These can be registered with the IPO. The 
IPO's website (www.ipopng.gov.pg) has useful 
information and also contains the application 
forms and filing requirements for registration of 
trademarks, patents and designs. 



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3 Ensure that you own the IP rights to 
material created for your organisation 

Generally, IP rights are owned by the person 
who created the material. However, if a 
person creates material as part of their work 
for an organisation, they can contractually 
agree to assign those IP rights to the 
organisation. 

As noted above, your organisation should 
therefore consider obtaining written 
agreements from all employees, contractors 
and volunteers that confirms that IP rights in 
materials created in the course of their duties 
for your organisation belong to your 
organisation. 

4 Ensure the material states that it is 
protected by IP rights 

It is common to indicate on any material 
subject to IP rights that those rights apply. The 
most usual ways to do this are as follows: 

■ using the symbol ©and the name of the 
copyright holder on any copyrighted 
materials; 

■ using TM on any trade mark (whether 
registered or otherwise); and 

■ using ® to indicate any trade mark that has 
been registered. 

6.3 What about protecting IP on the 
Internet 

Your IP rights can be particularly hard to protect 
online, due to the international and anonymous 
nature of internet usage. The laws in this area are 
complex, and your rights may depend on the laws 
of the country in which the IP infringer is located. 
However, the following are a few practical tips to 
protecting your organisation's copyright and 
trademarks online. 

COPYRIGHT 

If your organisation believes that its copyright has 
been infringed, the first step should be to contact 
the infringer, state that the material is infringing, 
and ask for that material to be taken down from the 
internet. 

If the infringer refuses, or your organisation cannot 
contact them, the next step should be to contact 
the host of the material. Popular websites such as 
YouTube and Facebook have IP infringement 
policies. Your organisation should alert the host to 



the copyright infringement, and seek to have the 
host remove the material. 

A number of countries also have laws that require 
internet service providers and hosts to take down 
infringing material when they have received a 
notification of infringement. 

TRADE MARK 

The registration of trade marks in PNG only 
prevents the use of that trade mark within PNG 
and in other countries that are signatories to the 
TRIPS agreement (an international treaty on trade 
mark protection). However, most common law 
countries^"^ have an action for 'passing off 
(described above). 

SOCIAL MEDIA 

Many social media websites and tools (such as 
Facebook and Twitter) may allow your organisation 
to have an account in its own name. 

There is a growing problem with persons 
pretending to be another organisation or person. 
These social media tools generally have a 
mechanism to deal with this. For example, on 
Facebook you can fill out a form to prevent 
someone registering your organisation's name as 
their username. There is also a process by which 
you can complain that someone has infringed your 
trade mark. However, you should note that these 
are policies of the relevant website, not legal 
rights. 



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7 Business Names 

IMPORTANT 

At the time of writing, tine Government is 
considering amendments to the Business Names 
Act. Your organisation should check to see 
whether there have been any updates to the law in 
this area. More information on registering a 
business name is available from the Investment 
Promotion Authority. 

'CARRYING ON A BUSINESS' AND 
REOUIREMENT TO REGISTER 

If a person wishes to carry on a business in Papua 
New Guinea in a name other than their own, they 
must register their business name. It is a criminal 
offence to carry on a business in Papua New 
Guinea without this registration.^"^ 

'Carrying on a business' is potentially a broad 
concept. If your organisation provides goods or 
services for a fee, then it is likely that it is 'carrying 
on a business' and may need to register a 
business name. However, if your organisation 
does not provide goods or services, then it may not 
be carrying on a business for the purposes of 
business name registration. 



7.1 How does your organisation register its 
business name? 

Business names are registered with the 
Investment Promotion Agency (IPA) of Papua New 
Guinea. Your organisation must lodge an 
application with the Business Names Registrar. 
This requires the payment of a fee - currently 
K50.00 



303 



When applying for registration, details such as a 
description of the nature of the business and the 
address at which the business will be carried out 
must be provided.^"'* The registrar must also be 
advised if any of these details change. 

A Business Name is valid for three years. After 
three years, the name must be renewed if the 
business is still in operation. 

7.2 What business names can be 
registered? 

The name must define the type of business or 
identify the proprietor. It must not contain words 
that are misleading or offensive, or include 



abbreviations such as 'Pty Ltd' or words such as 
'Holdings' or 'Group'. It cannot be a name that is 
already registered. 

7.3 How does your organisation prevent 
infringement of its business name? 

It is an offence for anyone to use a business name 
to carry out business unless they have registered 
the name, or it is their personal name. This means 
that it is an offence if someone uses your 
organisation's business name for business without 
your organisation's permission 



305 



7.4 What are your organisation's 
obligations around use of its business 
name? 

Your organisation must display your organisation's 
business name outside your organisation's place 
of business and leave its certificate of business 
name registration in a conspicuous place. Your 
organisation must use its business name on all 
business transaction documents.^"® 



BUSINESS NAMES AND TRADE MARKS 
A common mistake organisations make is 
assuming that because a business name is 
registered, it is also protected as a trade mark. 
This is not the case. To properly protect your 
organisation's business name, your organisation 
must register for both. 



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8 Using other people's IP 

In addition to protecting your organisation's own 
IP, your organisation sinould also be careful not to 
infringe the IP of other persons and entities. 

This should be given particular consideration when 
your organisation is: 

■ developing its own IP - for example, your 
organisation should make sure any trademarks 
that are being developed are original and not 
deceptively similar to an existing trade mark; 

■ preparing materials - for example, your 
organisation should make sure that it does not 
plagiarise the work of others; and 

■ using the IP of others - for example, your 
organisation should make sure that any 
materials prepared by other people that it uses 
or distributes is acknowledged as the property 
of the owner. 

If your organisation infringes the IP of someone 
else, consequences may include: 

■ being required to pay money to owner of the 
IP; 

■ being required to stop infringing the IP (for 
example, by ceasing to use a trade mark or 
publishing material. This may mean that your 
organisation has wasted money in preparing 
those trademarks or materials); and 

■ your organisation's reputation suffering. 



RESOURCES 

Copyright and Neighbouring Rights Act 2000 

Trade Marks Act 1978, Trade Marks Regulation 
1979 

Land Registration Amendment Act 2009 

Patents and Industrial Designs Act 2000, Patents 
and Industrial Designs Regulations 

Business Names Act 1963 



FURTHER INFORMATION 
For further information on intellectual property and 
how your organisation can protect its intellectual 
property, visit the website of the Intellectual 
Property Office (www.ipopng.gov.pg/). 

The Investment Promotion Agency website 
(http://www.ipa.gov.pg/) also contains a fact sheet 
and helpful information on business name 
registration. 



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FACT SHEET: INTELLECTUAL PROPERTY QUICK GUIDE 







1 






n 


lat does it protect? Examples 


k 




y What rights does it give? IHow long does it last? When is it infringed? 




















Copyright 


Literary and artistic 
works of original 
intellectual creation 


Publications, 
music, novels, 
movies 


Automatic on 
creation 


Exclusive right to 
reproduction, distribution, 
broadcasting, and 
translation, and also moral 
rights and neighbouring 
rights 


The author's life plus 50 
years (or 50 years from 
publication for 
anonymous or 
collective works) 


When it is substantially 
reproduced, subject to 
exceptions of private 
purposes, public 
institutions, teaching 
purposes etc 


Trade Mark 


What you use to 
identify your 
organisation to the 
public 


Logo, phrase or 
brand name 


Registration with 
the IPO 


Exclusive use, or use with 
limitations, for the goods 
and services for which it is 
registered 


10 years, but it can be 
renewed 


When a substantially or 
deceptively similar mark 
is used for the same 
class goods or services 


Patents 


Original inventions that 
are of practical use, 
new, and involve an 
inventive step 


Cars, medicine 


Application to the 
IPO 


Exclusive rights to 
commercially make, use, 
distribute and sell and 
invention 


Generally 20 years 


When another person 
commercially makes, 
uses, distributes or sells 
the invention 


Industrial 
Design 


Aesthetics of an article 


Patterns and 
shapes, such as 
jewellery or 
household items 


Registration with 
the IPO 


Exclusive right to exploit the 
design 


5 years, but may be 
renewed for up to 1 5 
years 


If someone else exploits 
the design, unless they 
were not aware that the 
design was registered 


Business 
Name 


The name under which 
your organisation 
carries on its business 
(not strictly intellectual 
property) 


The name of a 
business 


Application and 
registration with 
the IPA 


Exclusive right to use that 
business name, in that no 
other person may register 
that same name 


3 years, but may be 
renewed if the business 
is continuing 


It is an offence for 
someone else to use your 
business name for 
business, unless it is their 
personal name 



Note: At the time of publication, the government is considering amendments to the Business Names Act. 



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4 Your operations 

Contracts 

This section sets out some general principles of contract law. It is designed to help your 
organisation identify and comply with its rights and obligations under its contracts. 

There are many different types of contracts and specific rules may apply to certain 
contracts. This section deals with funding agreements with governments and donor 
organisations, and agreements between two organisations to co-operate. 

Other sections of this handbook deal with specific types of contract. For example: 

• for more information on leases, sub-leases and contracts to buy and sell land, see 
the Leasing Land and Premises section; 

• for more information on employment contracts with employees, see the 
Employment section; 

• for more information on contracts to buy and sell goods, see the Dealing with the 
Public section; and 

• for more information on insurance contracts, see the IVIanaging Risks section. 

If your organisation is unsure of its rights or obligations under a contract or agreement, it 
should obtain legal advice. 



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1 Preparing to enter a contract 

Before your organisation enters into a contract, it 
sinould consider a number of issues. 



1.1 What are the rights and obligations 
under the contract? 

What is your organisation inoping to obtain from tine 
contract? WInat does it understand its obligations 
to be? Does tine otiner party (or other parties) have 
the same understanding? 

To be legally binding, a contract generally needs to 
provide for each party to have obligations under 
the agreement (known as 'consideration'). This 
requirement does not apply to deeds. 

1.2 How should the document be 
prepared? 

A document outlining the agreement of the parties 
needs to be prepared (if the contract is in writing). 
It is usually best to have this performed by a 
lawyer. A lawyer can identify the terms that should 
be included and can help ensure the document 
protects your organisation's interests. 

It is important that all key terms are included as a 
contract may also not be enforceable if key terms 
are missing and each party's obligations are 
unclear or incomplete. 

Special requirements apply when preparing certain 
types of contracts. For example: 

■ many contracts need to be in writing to be 
legally binding;^°^ 

■ some contracts (such as the governing 
document of a trust) also need to be set out in 
a special document called a 'deed'. The main 
difference between a deed and an agreement 
(other than different execution requirements) is 
that deeds do not require any 'consideration'. 
That is, a deed can be a record of a one-way 
promise to do something; and 

■ contracts dealing with an interest in land 
(including transfers, leases, mortgages, 
charges, easements and nominating trustees) 
must be in a form approved by the Registrar of 
Titles and published in the National Gazette. 

1.3 Will the agreement be binding? 

The nature of the agreement should be 
considered. A contract will not be legally 



enforceable unless the parties intended it to create 
legally binding rights and obligations. 

For example. Memoranda of Understanding (or 
MOUs) are typically non-binding. Does your 
organisation intend that the contract creates legally 
binding obligations or sets out non-binding rules? 

MEMORANDA OF UNDERSTANDING AND 

MEMORANDA OF AGREEMENT (MOUS AND 

MOAS) 

An MOU or MOA is often entered into by 

organisations and government departments to put 

in writing their intention to work together. 

Usually MOUs and MOAs are not legally binding or 
enforceable. However, this is not always the case. 
Your organisation should be mindful of this when 
partnering with other organisations. It is preferable 
to specifically state whether or not an MOU or 
MOA is intended to be binding. For example: 

' The parties agree that this MOU does not create 
legally enforceable rights or obligations and is a 
statement of intent only. The parties represent to 
one another that they do not rely on the MOU and 
that the MOU places no commitment on either 
party to proceed with any transaction or project.' 

If it is intended that the partnership is governed by 
legally binding and enforceable obligations, then it 
is advisable that a legally binding contract is used, 
not an MOU or MOA. This will reduce confusion 
about whether the agreement is binding. 

1.4 Can your organisation comply with its 
obligations? 

Your organisation should ensure it can comply with 
its obligations under the contract. For example, if 
your organisation will need to provide services 
under the contract, does it have enough workers or 
the right skills to provide the services? 
Consideration should also be given to the impact 
the contract will have on the organisation - 
financially and on its broader operations. 

1.5 Can the other party comply with its 
obligations? 

Your organisation should also carefully consider 
the other party to the contract and whether they 
can and will comply with its obligations. If they do 
not comply, does the contract state what the 
consequences will be? Does your organisation 
have a plan for what to do if the other party does 
not fulfil its obligations? 



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2 Entering into a contract 

'Execution' of a contract is tine process of signing 
or agreeing to a contract, so that it becomes 
binding. Tine requirements for executing a valid 
contract will depend on the business structure of 
your organisation and the type of obligation or 
interest you want to deal with. 

The table below shows the different execution 
requirements for deeds and other types of written 
contracts, and how those requirements change for 
different types of organisations. 





1 1 




i 


Eecuting a 


writinq (not as 


H 










Incorporated 


Attach the 


Signed by a 


association 


common seal 


person with 




of the 


express or 




association^"^ 


implied authority 
to act on behalf 
of the 

association, eg a 
director=°^ 


Company 


Attach the 


Signed by a 




common seal 


person with 




of the 


express or 




company^^° 


implied authority 
to act on behalf 
of the company, 
eg a director^^ 






Co-operative 


Attach the 


Signed by the 


society 


common seal 


Chairman and 




of the 


Secretary on 




society^^^ 


behalf of the 
Board of the 
Society^" 


Trust 


Same as the 


Same as the 


(Trustee) 


execution 


execution 




requirements 


requirements of 




of the trustee 


the trustee (in its 




(in its capacity 


capacity as 




as trustee of 


trustee of the 




the trust) 


trust) 



Many organisations have a policy in relation to who 
may enter into contracts on behalf of the 
organisation and how persons are authorised to do 
this. It is advisable to keep a record of the people 
who are authorised to sign contracts. 

If the contract is not in writing, it may be difficult to 
show when the parties have entered into the 
contract. Usually this will be by verbal agreement 
or by the parties acting as if the contract is binding. 



3 Your organisation's 
obligations 

it is important to identify your organisation's 
obligations under the contract so that it is 
understood what the organisation must do and 
when it needs to perform each obligation. This will 
help to avoid your organisation being in breach of 
the contract. 

A helpful idea may be to prepare a register of 
obligations while you are identifying your 
organisation's key obligations. This register could 
set out what the obligations of your organisation 
are in an easy to read way, so that it is not 
necessary to continually re-read the contract and 
identify the obligations regularly. 

3.1 When do your organisation's 
obligations start? 

It is common for commercial contracts to include a 
section or clause which sets out when the rights 
and obligations under the contract start. Most 
contracts start on the date that the last party signs 
the agreement. Some contracts, for example 
contracts dealing with land, may state that the 
agreement takes effect on a certain date in the 
future or a certain number of days after the last 
party signs the agreement. 

3.2 What types of obligations are typical? 

Set out below is a list of some of the obligations 
typically imposed on organisations under a funding 
agreement. 

TYPICAL OBLIGATIONS UNDER A FUNDING 
AGREEMENT 

■ Carry out the activity or project to which the 
funding relates, in accordance with a plan or 
proposal agreed with the donor. 

■ Advise the donor of any delay or difficulties in 
carrying out the project or activity. 

■ Use the funds that have been provided only for 
the activity or project (or other uses permitted 
under the contract), and not for any other 
purposes (unless agreed by the donor). 

■ Acknowledge the donor and the funds they 
have provided to the organisation in any 
materials or publicity. 

■ Seek and obtain the approval of the donor to 
use the funds for other purposes or to 



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otherwise deviate from tine agreed project plan 
or proposal. 

■ Maintain records and accounts of the goods or 
services acquired with the funds (including 
receipts). 

- Provide reports to the donor at specified times 
covering specified matters. 

■ Comply at all times with laws, regulations and 
applicable ethical guidelines. 

- Provide a report at the completion of the 
activity or project, or when all funds have been 
used. 

- Return to the donor any unused funds at the 
completion of the project or the end of the 
contract. 

3.3 What are definitions? 

Most contracts have a 'Definitions' section. In 
reading a contract and identifying your 
organisation's obligations, it is important to keep 
looking at the definitions of terms used. The 
definition given to a term or word in the contract 
may be different to its ordinary meaning. For 
example, the word 'Employees' may be defined in 
the contract to include volunteers, contractors and 
agents (in addition to employees). 

3.4 What are the consequences of non- 
compliance? 

Once you have identified your obligations under a 
contract, it is very important that you comply with 
them fully and not just in part. Failure to comply 
with your obligations can have serious 
consequences, including: 

being required to pay damages (i.e. money) to 
the other party; 

being required to repay funds or return 
property; 

the other party may be able to terminate the 
contract; 

your organisation may lose other rights under 
the contract; and 

the reputation of your organisation may be 
adversely affected. 

It is important to make sure that you comply with 
you obligations fully, including in relation to the 
timing of the obligation, the extent of the obligation 
and any notification requirements of the obligation. 



EXAMPLES OF CONTRACTUAL BREACHES 
Organisation PNG has entered into a funding '~^ 
contract with Donor PNG for one of its projects. 

Under the funding contract. Organisation PNG is 
required to provide reports on the first Monday of 
each month to Donor PNG's Project Director in 
Goroka and Executive Director in Port Moresby. 
The reports must include certain information. 

Organisation PNG may not fulfil its obligations 
under the contract if it: 

■ provides reports on the first Tuesday or 
Wednesday of a month, or misses a month; or 

■ only provides a report to the Project Director in 
Goroka (and not to the Executive Director in 
Port Moresby); or 

■ fails to include in each report all the matters it 
is required to include. 



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4 Understanding contracts 

Aside from the clauses which cover the key 
obligations of the contract, a contract may contain 
the following types clauses. Not all of these 
clauses will be necessary, depending on the 
nature of the contract. 

- Tax: If appropriate, it is advisable to include a 
tax clause or refer to tax in other relevant 
clauses. Taxes which are typically relevant to 
contracts include GST and stamp duty. Issues 
to consider in relation to tax include: If tax is 
payable, who is to pay it? Does the price 
specified in the contract include GST? Is GST 
only payable once a tax invoice is provided? If 
a tax refund is received in relation to tax paid 
does it need to be remitted to the other party? 
See the Taxation section for further information 
on tax. 

- Confidentiality: Many contracts include a 
confidentiality clause. You should carefully 
consider the obligations a confidentiality clause 
imposes and the implications of such a clause 
for your organisation and. It is common to 



state in a contract that the confidentiality 
clause survives termination of the contract. It 
may be appropriate to include certain 
exceptions to confidentiality in the agreement. 
Issues to consider in relation to this include: 
What is 'confidential information' for the 
purposes of the contract? When is disclosure 
of confidential information permitted? Is the 
contract itself confidential? Does a party have 
the right to demand the return or destruction of 
confidential information it has provided? For 
example: 

' The parties agree that the terms of this 
agreement, and any information received 
from another party in the course of 
performing this agreement, are confidential 
and must not be disclosed to any person 
without the consent of the other party.' 

Under this example clause, the contract itself 
is confidential and so is any information 
received in the course of carrying out the 
contract. This information cannot be given 
(including orally) to another person unless the 
other party agrees. 




©CARE 



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Governing Law: Often there is a clause which 
sets out which law is to apply to the contract 
(eg Bougainville law or the law of New South 
Wales) and/or where each party is permitted to 
bring proceedings in Court. For example: 

' This agreement is governed by tine law of 
Papua New Guinea. Tiie parties agree tiiat 
any legal action in relation to this 
agreement may be brought in any court of 
competent jurisdiction in Papua New 
Guinea.' 

Termination: It is usually advisable to include 
a clause which sets out the circumstances in 
which the contract may be terminated. Issues 
to consider in relation to this include: Do the 
parties have a right to terminate for no reason? 
Does the contract continue indefinitely? (That 
is, there are no termination rights - this is to 
generally be avoided for most contracts.) 
Should a party be able to terminate when 
certain events happen? Can a party terminate 
immediately or do they need to give a period of 
notice? See the part on 'Ending a Contract' 
further below. 

Dispute Resolution: Some contracts set out a 
process the parties must follow to resolve 
disputes under the contract before going to 
court. Whether such a clause is appropriate 
depends on the nature of the contract. An 
example procedure may be for representatives 
of the parties meet to discuss the problem, if 
they cannot resolve it then senior 
staff/management of the parties meet to 
discuss the problem, and if the dispute 
remains unresolved, the parties agree to 
appoint an independent mediator to help them 
resolve the dispute. Only once mediation fails, 
the parties are able to go to court. For 
example: 

' The parties agree that in the event that 
any dispute arises under this agreement, 
the parties will first meet, discuss and 
attempt in good faith to resolve the dispute 
for a period of 30 days. If the dispute 
remains unresolved after that 30 period, 
then the parties may then have recourse to 
a court of competent jurisdiction.' 

Assignment: Most funding contracts will 
contain a clause which prohibits the 
organisation from 'assigning' the contract to 



another party. Assigning a contract is a 
process whereby the benefit of a contract is 
transferred to another entity. For example: 

'[The organisation] must not assign its 
interest in this agreement without the prior 
written consent of [the donor].' 

Indemnity: An indemnity is a promise by one 
party to reimburse another party for losses 
they suffer due to specified events. It can be 
thought of as a promise to make the party 
'whole'. For example, an organisation may be 
required to indemnify a donor for any loss they 
suffer because of the organisation breaching 
the funding agreement, or indemnify the donor 
in relation to losses they suffer due to the 
organisation carrying out the project 
negligently. Indemnities should be carefully 
considered and reviewed. For example: 

'[The organisation] indemnifies [the donor], 
its employees and advisors for any loss or 
damage they may suffer due to [the 
organisation] failing to comply with its 
obligations under this agreement' 

Exclusion or limitation clauses: Some 
contracts may exclude or limit the 
responsibility of one of the parties if something 
goes wrong in carrying out the contract (and in 
this sense an exclusion clause is the reverse 
of an indemnity). 'Exclusion clauses' are also 
used in insurance contracts, to set out the 
events or circumstances where the policy 
holder cannot claim insurance for any loss or 
damage suffered. Your organisation should 
read the clause carefully to understand when 
each party will be responsible for loss or 
damage. For example: 

' The donor is not liable for any loss due to 
[insert event].' 

Amendment: Generally, a contract can only 
be amended by the agreement all the parties. 
Often a clause in the contract will state this. In 
some contracts one party may be given the 
right to amend parts of the contract without the 
other party agreeing. Whether this is 
appropriate depends on each contract. For 
example: 

' The terms of this agreement can only be 
amended by the written consent of all 
parties.' 



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5 Resolving problems and 
obtaining remedies 

5.1 How should problems be resolved? 

As noted above, many contracts require the parties 
to attempt to settle a dispute or problem about a 
contract between themselves before taking a 
dispute to court. In any event, it is usually 
preferable to seek to resolve the issue without 
having to go to court as this can save time and 
money. Many contractual disputes can be 
resolved through negotiation. 

5.2 When can your organisation go to 
court? 

If your organisation believes that the other party 
has or is going to breach the contract, one option 
is to go to court to have the matter resolved. Your 
organisation will need to prove the existence of the 
contract and that there was (or will be) a breach by 
the other party. 

If the other party has not breached the contract, 
but your organisation feels that the contract is 
unfair, one option may be to seek a court to review 
the contract. A court has the power to review any 
contract (and other types of dealings, such as 
promises and undertakings) of an economic or 
commercial nature. The court must be satisfied 
that the transaction was not genuinely mutual or 
was manifestly unfair to a party 



314 



Circumstances that the court considers to be unfair 
include: 

- where one party did not understand the 
contract and no genuine effort was made to 
explain the contract to the party before 
entering into the agreement; 

- where one party is in a position of power over 
another party (economically, socially, 
personally or other) so that the other party did 
not have true freedom of choice in relation to 
the transaction; 

■ one party had information affecting the fairness 
of the transaction which was not told to the 
other party; and 

■ one party was mistaken or had miscalculated 
the consequences of the transaction and the 
consequences are so against the party's 
interests that the party cannot be reasonably 
held responsible for them. 



Before reviewing a contract, the court will try to 
mediate the problem (that is, to settle the problem 
outside formal court processes). For more 
information on unfair transactions, see the Dealing 
with the Public section. Your organisation should 
seek legal advice if it is considering seeking review 
of the contract by a court. 

5.3 How can disputes with third parties be 
resolved? 

Generally a contract can only be enforced by or 
against the parties to the contract. Persons who 
are not parties to the contract are often called 'third 
parties'. For example, in a contract between A and 
B, usually only A or B can ask the court to uphold 
the contract if something goes wrong. A third party 
generally cannot enforce A and B's contract, even 
if the third party would benefit by the contract being 
performed. 

5.4 What remedies can a court order? 

If a party to a contract breaches the contract or 
otherwise fails to perform its obligations under the 
contract, the three main remedies for the other 
party are damages, an injunction and specific 
performance (set out below). The contract itself 
may also set out remedies (for example, an 
indemnity). 

- Damages: a court can order a party who 
breaches a contract to pay money to the 
innocent party (this is called 'damages'). The 
court can award damages while the contract is 
still being performed or after the contract 
comes to an end. Damages generally aim to 
put the innocent party in the same financial 
situation as if the breach did not happen. 

- Injunction: if a court believes a party is about 
to do something which would breach the 
contract, it can make an order preventing that 
party from undertaking that action. Courts will 
generally only award an injunction in limited 
circumstances. 

■ Specific performance: there may be 
situations where the innocent party would 
prefer the contract to be performed after a 
breach, rather than receive damages as 
compensation. This will occur where the value 
of the contract being performed outweighs the 
likely amount that the court will award in 
damages. The court may make an order 
requiring the party in breach to perform their 



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obligations. Courts will generally only order 
specific performance in limited circumstances 
and not for certain types of contracts (eg 
contracts of employment). 

Additionally, as discussed below, the court may 
determine that one party has the right to end the 
contract. 



6 Ending a contract 

Contracts can end for a variety of reasons, 
including by one party terminating the contract 
(which may or may not be because of a dispute), 
by agreement, because the contract can no longer 
be performed or because the contract reaches its 
end date. 

6.1 When is the contract's end date? 

Contracts will normally contain a clause that sets 
out when the contract finishes and when the 
parties will stop having rights and obligations under 
the contract. The end date of a contract may be: 

■ at the end of a certain time period (eg 5 years); 

■ if a specified event has occurred (eg a breach); 
or 

■ once the parties completely fulfil their 
obligations to one another. 

Some obligations may be expressed to continue 
after the end of the contract, for example 
obligations about confidentiality and privacy. 

6.2 How can a contract be ended by 
agreement? 

The parties can also jointly agree to end the 
contract at any time. If one party has already full 
performed their side of the contract, they may 
require the other party to give value in exchange 
for releasing them from their remaining obligations. 
If the original contract was in writing, it is 
preferable that the agreement to end the contract 
is also in writing. 

6.3 What is frustration? 

Sometimes circumstances change so that it is 
impossible to carry out the obligations under a 
contract. For example, for a contract for the sale 
of a building, if the building is damaged by a flood 
before the new owner moves in and the flood is not 
the fault of either party, the court may find that the 
contract has automatically ceased (become 
frustrated). In this case, a court will not hold either 
party to the agreement. 

A court must be satisfied that there is no possible 
way for the contract to continue before it will 
declare the contract to be frustrated. 



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6.4 How can a contract be terminated for 
breach? 

A breach is the failure of one party to perform a 
promise under the contract. A breach does not 
necessarily end the contract. 

As discussed above, depending on the type and 
severity of the breach it is typically preferable for 
the parties to try to work together to remedy the 
breach before going to court. 

If the parties decide to go to court, the normal 
remedy imposed by a court for a breach of contract 
is for the party in breach to pay damages (i.e. 
money) to compensate the innocent party (i.e. to 
put the innocent party in the same financial 
position as if the breach did not happen). Only 
serious breaches or breaches of important terms 
give the innocent party the right to choose to end 
the contract. 

Many contracts require the innocent party to give 
the other party an opportunity to fix the breach 
before the contract can be ended. In those cases, 
it is common that the innocent party must give the 
party in breach a certain number of days to fix the 
breach (this is known as 'giving notice'). If the party 
in breach does not fix the breach in that timeframe, 
the innocent party may immediately tell the party in 
breach that the contract has ended. The innocent 
party still has the right to damages for the breach. 

It can be difficult to tell whether a breach is serious 
enough to give the innocent party the right to end 
the contract. Some contracts will specify which 
breaches are serious breaches (for example, 
under a clause with the heading 'termination 
events'). 

If a contract is terminated for breach, neither party 
will be held to their promises but any rights held by 
the parties before the end of the contract will 
typically survive. 



TERMINATING A FUNDING AGREEMENT 
The donor is often given the right to terminate a 
funding agreement (and demand the return of any 
unused funds) if the organisation receiving the 
funds: 

■ becomes bankrupt or insolvent, or is otherwise 
unable to carry out the activity or project; 

■ fails to carry out the project or make 
satisfactory progress of the project, in the 
opinion of the funder; or 

■ breaches the funding agreement and fails to 
correct that breach within a certain time. 

Often a funding agreement requires that upon its 
termination the organisation must: 

■ prepare a statement of how the grant funds 
were spent and have the statement audited by 
an independent auditor; 

■ cease spending the grant funds; and 

■ return any unused and uncommitted grant 
funds to the donor. 



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Dealing with the public 



Consumer protection laws aim to protect the rights and safety of people who use goods 
and services. Your organisation may be affected by these laws in two ways: 

• the laws can protect your organisation when your organisation purchases goods or 
services (ie, when your organisation is a consumer); and 

• your organisation may have obligations when it provides goods and services to 
others. 

Aspects of consumer law your organisation should be aware of include: 

• the obligation not to make misleading or deceptive advertisements; and 

• rules around buying and selling goods and services. 




©Josh Estey/CARE 



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1 Buying and selling goods and 
services 

1.1 Minimum standards for goods 

If your organisation is buying or selling certain 
types of goods in PNG the goods must meet 
certain minimum standards. These standards 
apply to goods but not to buying or selling services 
or real property (eg land). 



L 




If the goods are sold 
by description (that is, 
the buyer has not seen 
the goods), the goods 
must meet the 
description given by 
the seller^'^ 


Your organisation orders 
a new printer over the 
internet, but the seller 
sends your organisation a 
second-hand printer 


The goods must be 
free from defects 
(unless they were 
obvious to the buyer) 
and meet a basic level 
of quality, taking into 
account their price and 
description^^® 


Your organisation 
purchases office chairs. 
However, the chairs are 
faulty and cannot take an 
ordinary person's weight. 
The goods would not 
meet a basic level of 
quality 


The goods sold must 
do what they are 
supposed to do and be 
suitable for the 
purpose the buyer told 
the seller they were to 
be used for^ 


Your organisation 
purchased food for an 
office party. The food 
was mouldy and made 
your organisation's 
employees sick. The 
food was therefore not fit 
for purpose 


Where goods are 
bought and the buyer 
has only tested or 
examined a sample, 
every item in the bulk 
must be of the same 
quality as the 
sample^^^ 


Your organisation buys a 
bulkorder of paper for 
printing. After examining 
the first few pages in 
each pile, your 
organisation accepts the 
rest of the paper, but the 
paper at the bottom of the 
pile is ripped and dirty 


The seller owns the 
goods and has the 
right to sell them as 
described^^^ 


Your organisation buys a 
car from Matthew. 
However, Matthew stole 
the car and the police 
made him return it. 
Matthew has therefore 
breached the standard 
because he was not 
entitled to sell the car to 
your organisation 



1.2 Unsafe goods 

if your organisation is selling or supplying goods 
then it is responsible for making sure the goods 
are safe, even if your organisation did not make or 
manufacture the goods itself. 

It is illegal to sell or supply goods that: 

■ do not meet any safety standards or include 



required information; 



321 



322 



The buyer and seller are generally free to agree 
that any of these minimum standards do not 
apply.='° 



■ have been declared to be unsafe; or 

■ are permanently banned. ^^^ 

The National Gazette contains declarations for 
goods that are unsafe, or if there is a permanent 
ban. Your organisation could also contact the 
IGGG to confirm any requirements about selling or 
supplying particular goods. 

It is also important that your organisation has 
processes to quickly respond if goods that your 
organisation supplies are later discovered to be 
unsafe. Depending on the type of goods, this 
could include: 

- ensuring there are instructions about how the 
goods can be used safely; 

■ providing contact details for your organisation 
when the goods are sold; 

■ keeping records of the buyers, so they can be 
contacted later if necessary; and 

■ having processes to make sure the 
organisation can immediately stop selling the 
goods if safety issues arise. 

If goods are declared unsafe, depending on the 
nature of the goods and how widely they are 
distributed, your organisation may need to have 
processes in place to inform the public about any 
safety issues. 

1.3 Seconri h;inH nnods 

There are additional requirements for selling 
second hand goods. If your organisation wants to 
sell second hand goods, it will need: 

■ a licence - which can be obtained from the 
Director of Public Health (for second hand 
clothes) or the Gommissioner of Police (for 
other second hand goods);^^'* and 

■ to keep a register of second hand articles, 
including a description of the items your 
organisation has purchased, and how much 
your organisation bought and sold the item 
for.^^^ It must be signed by both your 



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organisation and tine person from winom tine 
article is purclnased or received 



326 



Your organisation must also hold onto (and not 
alter) second-hand articles for at least three days 
after receiving them before they can be resold. 



327 



1.4 Other requirements for particular 
goods and services 

There are also more specific requirements that 
apply when buying and selling particular types of 
goods and services. 



The following list provides some examples of the 
types of requirements that apply to particular 
goods and services and where they can be found. 
However, this list is not comprehensive. Your 
organisation should obtain legal advice and/or 
check with the ICCC if your organisation is 
planning to begin selling particular types of goods 
or services. 



FIGURE 1 : EXAMPLES OF SPECIFIC REQUIREMENTS FOR PARTICULAR GOODS AND SERVICES 





Food 


Rice and flour prices may be regulated by the ICCC. 

■ The Food Sanitation Act 1 991 sets standards about food safety and 
labelling, and allows for food inspections. A licence may be required to 
supply food. 

■ The Public Health Act 1973 also sets standards about food safety and 
handling. 

■ The Slaughtering Act 1 964 sets standards about preparing meat 
products. 


Alcohol 


■ The Liquor (Licensing) Act 1963 sets standards about selling alcohol 
safely and appropriately. A licence may be required to supply alcohol. 

■ The Excise (Beer) Act 1952 regulates the making of beer and a licence 
may be required. 


Transport services 


Public transport and taxi fares may be regulated by the ICCC. 


Gambling and lotteries 


■ The Gaming Control Act 2007 regulates gambling and a licence may be 
required. 


Fuel 


Fuel prices may be regulated by the ICCC. 


Medicines or medical 
devices 


■ The Medicines and Cosmetics Act 1 999 includes minimum standards 
around supplying medical products and a licence may be required. 


Utilities 


Utilities (eg, water, sewerage, electricity) may be regulated by the ICCC 
and a licence may be required. 


Communications services 
(post, telecommunications) 


Communications services may be regulated by the ICCC and a licence 
may be required. 


Financial services (eg 
loans) 


Financial services are heavily regulated and your organisation must 
obtain advice about its obligations. Relevant laws include the Banks and 
Financial Institutions Act 2000, Loans Securities Act 1960, and the 
Savings and Loan Societies Act 1961 . 



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1.5 Avoiding unfair transactions 

Finally, your organisation should ensure when it 
enters into a transaction to sell goods or services 
that the transaction is mutually agreed and is not 
clearly unfair to the buyer. 

A person (including your organisation, if it is the 
buyer) can ask a court to review a transaction and 
if the transaction is found to be unfair, the court 
can amend the transaction to make it fair.^^® To 
have access to this remedy, your organisation 
would need to commence a court action to have 
the matter heard and determined. 

To avoid unfair transactions when your 
organisation is selling goods or services, your 
organisation should ensure that:^^® 

■ buyers understand the transactions and what 
their rights and obligations are; and 

■ your organisation has given the buyer all the 
information the buyer needs to understand the 
transaction and nature of the goods or 
services. 

A transaction is not just a contract. In addition to 
covering written contracts, a transaction may also 
be a promise, agreement, dealing or undertaking 
between two people. The transaction needs to be 
'of an economic or commercial nature' (eg, involve 
some type of payment) but it could be informal or 
incomplete. 

WHEN YOUR ORGANISATION IS SUPPLYING 
GOODS AND SERVICES: A SUMMARY 
Your organisation should ask itself the following 
questions when supplying goods and services. 

- Are the goods your organisation is supplying 
the same as described (eg in an advertisement 
or over the phone)? 

■ Are the goods free from defects, or if they have 
defects, have these been explained to the 
buyer? 

- Are the goods safe and suitable for the 
purposes the buyer has said they will be used 
for? 

- Are the goods the same as any sample the 
buyer has checked? 

■ If the goods are second hand goods, does 
your organisation have a licence to sell them 
and comply with the record-keeping 
requirements? 



■ Does your organisation own the goods and is it 
able to legally sell them? 

- Are there any product safety standards or bans 
applicable to the goods and has your 
organisation complied with those standards? 

■ Does your organisation provide instructions 
about how goods can be safely used? 

■ If appropriate, does your organisation keep 
records about buyers of its goods and have 
processes to inform its customers if goods are 
unsafe? 

■ Has your organisation confirmed whether there 
are any other requirements that apply to the 
particular type of goods or services being 
supplied? 

■ Has your organisation ensured the buyer 
understands the transaction and their rights 
and obligations? 

WHEN YOUR ORGANISATION IS BUYING 
GOODS AND SERVICES: A SUMMARY 
If your organisation buys goods or services and is 
unhappy with the standards or safety of the goods 
or services, or the fairness of the transaction, your 
organisation may be able to obtain relief. 

The first step should be to collect evidence about 
the goods or services (eg photographs to show 
their quality) and keep records about the 
transaction in case your organisation needs to 
prove what happened. The following are some 
options. 

■ Discuss with the seller: Your organisation 
could begin by speaking or writing to the seller, 
explaining the situation and requesting 
compensation or a refund. 

Contact the ICCC: If the matter cannot be 
resolved with the seller, the ICCC may be able 
to help your organisation to resolve the 
dispute, for example through mediation or 
negotiation. However, the ICCC cannot 
generally go to Court on your organisation's 
behalf. 

Consider legal options: Legal advice should 
be sought as soon as possible if these steps 
are not successful. As a general rule, any 
court proceeding needs to be commenced 
within 6 years. 



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Different remedies may be available depending on 
the type of claim your organisation makes. For 
example: 

■ in negotiation and mediation, your organisation 
and the seller can generally agree on the way 
to resolve the dispute; 

■ if your organisation brings a claim to court 
claiming a transaction is unfair, the court could 
rewrite the transaction to address the 
unfairness; 

- in some cases brought to court (eg for breach 
of a minimum standard), your organisation's 
remedies could include compensation or 
obtaining a refund; and 

- in other cases brought to court (eg for breach 
of unsafe goods requirements), the seller may 
have broken the law and could be convicted 
and given a fine or even imprisonment. 



2 Public communications and 
publications 

In addition to the requirements that apply when 
entering particular transactions, your organisation 
also has obligations when it makes comments to 
the public. Your organisation should ensure that: 

■ any commercial advertisements it produces 
are not misleading or inaccurate; 

■ it has the necessary registrations and licences 
to produce media; and 

■ any material it produces is not defamatory. 

2.1 Advertisements 

It is unlawful for an organisation to publish a 
statement in an advertisement that is untrue, 
inaccurate or misleading. ^^° An advertisement 
could include a poster, pamphlet, radio commercial 
or any other type of advertising. 

This prohibition only applies to a 'commercial' 
advertisement (an advertisement for benefit or gain 
as a result of people responding to the 
advertisement). It will depend on the nature of 
each advertisement as to whether it is a 
'commercial' advertisement. 

However, your organisation should still ensure that 
any materials or advertisements it produces are 
accurate and true. Even without the legal risks, 
producing misleading material could affect your 
organisation's reputation. 

2.2 Written publications 

If your organisation runs a printing press or 
publishes newspapers, these must be registered 
with the government and contain the current name, 
occupation and location of the printer and 
publisher and the location where it is printed. 

WHAT IS A 'NEWSPAPER'? 

A paper or a pamphlet may be a 'newspaper' if it 

contains any public news or remarks on any 

political matters, and is published for sale 

periodically and at least every 26 days.^^^ 

However, newsletters are not 'newspapers' if they 

are: 

■ provided only to your organisation's members; 
or 

■ a circular notice that includes your 
organisation's name and address and are only 
circulated internally within your organisation. 



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There is a Code of Ethics that applies to news 
media, and includes standards on accuracy, 
conflicts of interest, privacy and plagiarism. The 
Code of Ethics is not legally binding but your 
organisation may wish to comply with it as a matter 
of best practice. The Code of Ethics is available 
from the Media Council of Papua New Guinea 



The representation must be published or seen by 
someone other than the person who was 
represented 



337 



332 



A person may complain to the Independent Media 
Standards Committee (IMSC) about material your 
organisation publishes. The IMSC is an 
independent body comprised of representatives 
from the community. The IMSC may uphold or 
dismiss the complaint. The complaint process is 
not legally binding but complaints may have a 
negative effect on your organisation's reputation. 

For more information about regulation of the 
media, your organisation may wish to contact the 
Media Council of Papua New Guinea. ^^^ 

2.3 Other forms of media 

Your organisation may have other ways of 
communicating with the public that may be 
regulated. 

For example, to operate a radio or television 
station: 

■ a licence must be granted from the Papua New 
Guinea National Information and 
Communications Technology Authority 
(NICTA);^^^and 

■ any broadcasts must comply with the 
Broadcasting Code of Practice (available from 
the Media Council of Papua New Guinea), 
which imposes certain standards such as for 
decency, impartiality, honesty and to provide 
warnings about offensive content. 

2.4 Defamation 

When your organisation prepares written 
publications, gives speeches or publishes 
information^^^ that is critical of an individual, it 
should ensure that it does defame another person. 

Defamation is representing a person in a way that 
might:^^^ 

■ damage the person's reputation; 

■ harm the person's profession or trade; or 

■ lead people to shun, avoid, ridicule or despise 
the person. 



Your organisation should therefore be particularly 
careful when making statements or 
representations that could be offensive. However 
there are some important exceptions. These 
include where the representation: 

■ is true and it is in the public interest that it be 
made; 

■ was a fair comment in good faith for the 
information of the public; or 

■ was made on the challenge of the person who 



was allegedly defamed 



338 



If your organisation defames a person, it may 
include a fine and/or compensation. The amount 
of compensation can be difficult to predict. Courts 
have awarded damages for defamation from 
K1 ,000 to K90,500. Defamation is also a criminal 
offence and a person found guilty of defamation 
may be sentenced to up to two years 
imprisonment. 

AVOIDING DEFAMATION 
The best way to avoid claims of defamation is to 
make sure any representation your organisation 
makes is: 

■ true and accurate; or 

■ a fair comment on a matter of public interest. 

FURTHER INFORMATION 

The Independent Consumer and Competition 
Commission (ICCC) is PNG's consumer regulator, 
responsible for: 

■ promoting the interests of consumers; 

- informing the public about protecting 
consumers rights; and 

■ investigating complaints affecting consumers. 

If your organisation has a complaint as a 
consumer, your organisation could make a 
complaint to the ICCC against any business or 
supplier that provides goods or services. 



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HIV/AIDS 



The HIV/Aids Management and Prevention Act 2003 (HAMP Act) protects the rights and 
freedom of people affected by HIV/AIDS, and establishes processes to protect public 
health and prevent the transmission of HIV/AIDS. 

Even if your organisation is not focussed on HIV/AIDS issues, it will still be subject to some 
of the provisions of the HAMP Act. 

The HAMP Act prohibits discrimination of people living with or affected by HIV/AIDS, while 
implementing processes for the testing, counselling, reporting and confidentiality of 
persons affected by HIV/AIDS. This section provides an overview of the key obligations 
created by the HAMP Act, covering four acts which are unlawful under the HAMP Act: 

• discriminating against a person infected with or affected by HIV/AIDS; 

• requiring or coercing a person to undergo an HIV test; 

• stigmatising persons affected by or infected with HIV/AIDS; and 

• denying persons access to means of protection from HIV infection. 

The penalty and relief provisions for unlawful discrimination discussed below are equally 
applicable to each of the three additional unlawful acts. 

In addition to covering the above four unlawful acts, this section will also look at the 
confidentiality and reporting requirements under the HAMP Act. 

How does the HAMP Act apply to all organisations? 

The anti-discrimination provisions in the HAMP Act are applicable to all organisations. This 
means that all organisations must ensure they do not discriminate against any person 
because they are infected with or affected by HIV/AIDS (except in the circumstances 
permitted under the HAMP Act). 

Organisations must also ensure they do not stigmatise a person on the ground that they 
are infected or affected by HIV/AIDS, they do not force employees to undergo a HIV test 
and they do not deny a person protection from infection without a reasonable excuse. 

How does the HAMP Act apply to organisations involved with HIV/AIDS counselling 
and testing? 

Organisations involved with HIV/AIDS counselling and testing must ensure that post- 
testing counselling is offered to persons regardless of the test result, that positive results 
are appropriately reported, and that strict confidentiality is maintained. Such organisations 
must be careful not to unlawfully coerce a person into taking an HIV test and must ensure 
that they follow the regime for the notification of sexual partners. 



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1 Unlawful discrimination on 
the basis of HIV/AIDS status 

Under the HAMP Act,^^^ it is unlawful to 
discriminate against a person to their detriment 
because the person is infected with or affected by 
HIV/AIDS.^"*" 

At the date of publication, this offence carries a 
maximum penalty of a fine of K1 0,000 for 
corporations, or a maximum fine of K5,000 and 3 



years imprisonment for individuals 



341 



The law also prohibits discrimination on other 
grounds. See the Discrimination section for further 
information. 

1.1 When is an act done 'because' a 
person is infected with or affected by 
HIV/IDS? 

Where an act of discrimination is done for more 
than one reason, and only one of the reasons is 
because an individual is infected with or affected 
by HIV/AIDS, then a Court will presume that the 
act of discrimination was done to discriminate on 
the basis of HIV/AIDS 



342 



1.2 When is someone 'infected with or 
affected by HIV/AIDS'? 

The HAMP Act protects the various members of a 
community affected by HIV/AIDS as well those 
individuals actually infected with HIV or having 
AIDS. This includes: 

■ a person who has, or is presumed to have, 
HIV/AIDS; 

■ a person related to or associated with such a 
person; 

■ a person having, seeking or refusing to have 
an HIV test; and 

■ any persons associated with a group, activity 
or occupation associated with the 
transmission of HIV/AIDS. 

Therefore, people who are 'infected or affected by 
HIV/AIDS' is a very broad group, and extends 
beyond people who actually have the disease and 
their families. 

1.3 What are the remedies available for 
unlawful discrimination? 

Unlawful discrimination also gives the victim a 
cause of action against the offender, or in some 
cases, a potential offender.^"^^ The courts may 



order relief, including, but not limited to the 
following: 

■ a declaration of unlawfulness (a statement 
from a court that the conduct is unlawful); 

■ an injunction (a court order requiring a person 
to undertake or not undertake an action); 

■ an apology or retraction; 

■ reinstatement of employment; 

■ punitive or exemplary damages; 

■ compensation; and 

■ performance of any reasonable act to redress 
the loss or damage. 

1.4 What about positive discrimination? 

'Positive discrimination' is permitted by the HAMP 
Act. This means it is lawful to take action for the 
benefit, assistance, protection or advancement of 
those infected with or affected by HIV/AIDS.^'*'* 

It is also lawful to discriminate against a person 
infected by HIV or suffering AIDS if the 
discrimination is no more detrimental than 
discrimination on the grounds of having a different 
life-threatening medical condition. ^"^^ 

WHEN CAN DISCRIMINATION OCCUR? 
The HAMP Act includes a non-exhaustive list of 
examples of situations in which unlawful 
discrimination may occur.^"*® This includes, in 
relation to employees and contractors: 

■ the contract or arrangements for offering work 
or the terms of employment; 

■ a refusal or deliberate omission to offer work; 

- the method for awarding opportunities for 
promotion, transfer or training or to benefits, 
services or facilities; 

■ dismissal from employment or termination of 
contract of work; or 

■ other detriment in relation to employment or 
contract work. 

Discrimination may also occur in relation to: 

• admission to and benefits of industrial 
and professional organisations, clubs, 
and other associations; 

• access to and benefits of education and 
training; and 

• the provision of or access to goods, 
services or public facilities. 



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2 Unlawful screening 



In certain situations, ^"^^ tine most relevant of which 
is during employment or when being admitted to 
membership of an organisation, it is unlawful to 
require or coerce an individual to: 

■ undergo a HIV test; 

■ produce proof that the individual is not 
infected with HIV; or 

■ answer any questions which may reveal 
whether that person is infected with or 



affected by HIV/AIDS 



348 



It is also unlawful to screen for HIV under the 
pretence of a standard employment 'medical 
test'.^"*^ This is aimed at preventing employers 
sending employees for a standard medical test, 
which includes a hidden HIV test without the 
employees' consent 



350 



PROVIDING VOLUNTARY HIV/AIDS TESTING 
Employers or organisations wishing to provide 
access to voluntary HIV testing for their 
employees or volunteers should use authorised 
offsite providers who comply with the provisions of 
the HAMP Act. Employers or organisations must 
ensure (and explain clearly to employees and 
volunteers) that the testing is not compulsory and 
is confidential. 



3 Unlawful stigmatisation 

The HAMP Act makes it unlawful to stigmatise a 
person on the ground that they are infected with 
or affected by HIV/AIDS.^^^ 

WHAT DOES 'STIGMATISE' MEAN? 
'Stigmatise' generally means vilify, or to incite 
hatred, ridicule or contempt against a person by 
distributing to the public or communicating to the 
public anything that is threatening, abusive, 
degrading, provocative or offensive. 

There are exceptions to this prohibition which 
allow for discussion and examination of alleged 
stigmatisation. These exceptions include: 

■ a fair report of an act of stigmatisation; 

■ the communication, dissemination, distribution 
or publication of any matter subject to the 
testing of truth under defamation proceedings; 
or 

■ a public act, done reasonably in good faith 
and not malicious, for academic, artistic, 
scientific, research or religious discussion. 

Organisations involved in producing reports or 
similar communications regarding HIV/AIDS 
infected individuals must take special care in 
ensuring that they do not stigmatise individuals 
with HIV/AIDS, and fairly report the facts in good 
faith and in accordance with the HAMP Act. 



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352 



4 Unlawful denial of access to 
protection 

It is unlawful to deny a person access to a means 
of protection from infection of themselves or 
another by HIV (without reasonable excuse). 
This includes denying access to HIV/AIDS 
awareness materials, condoms, lubricant and 
other means of preventing HIV transmission. 
'Means of protection' also includes the exclusive 
use of razors, needles and syringes. 

If an organisation does not provide means of HIV 
protection to individuals at all or is not involved 
with HIV awareness or protection, then it is likely 
to be reasonable for such organisations not to 
provide means of protection to persons. However 
if an organisation generally provides means of 
HIV protection, then they would require a 
reasonable excuse not to provide such means to 
a person. Additionally, it would be unlawful for any 
organisation to actively prevent a person from 
accessing means of protection. 



5 Testing, counselling, 
reporting and confidentiality 
requirements 

The HAMP Act outlines a regime for the request 
and performance of an HIV test and the 
communication of test results. Your organisation 
will have different obligations under this part of the 
HAMP Act depending on whether your 
organisation is an employer, and whether it is 
involved with HIV/AIDS testing and counselling. 

For organisations involved in the testing, 
counselling or treatment of persons infected with 
HIV or suffering from AIDS, it is advisable to have 
formal policies and procedures to address the 
requirements under the HAMP Act outlined below. 
This will help to ensure that your organisation 
complies with its legal obligations under the 
HAMP Act, especially in circumstances where 
your organisation possesses information about an 
individual's HIV/AIDS status. See the part below 
on 'Ensuring your organisation complies with the 
HAMP Act'. 

5.1 Testing 

HIV tests may only be requested by a medical 
practitioner or a person authorised in writing by 
the Director of Medical Services of the province in 
which the test is to be carried out.^^^ This is to 
ensure that testing is only carried out in 
appropriate circumstances. 

It is unlawful for any other person to request an 
HIV test. It is also unlawful for a person to 
perform an HIV test unless it has been requested 
by a medical practitioner or authorised person 



354 



However, these rules do not apply where the HIV 
test is to be performed on donated blood, tissues 
or organs to be transfused or transplanted, or the 
test is an approved self-administered HIV test kit 
used by a person on themselves 



355 



Furthermore, if an HIV test is to be requested, it 
must be done with the voluntary, informed 
consent of the person to be tested, ^^^ and the 
results of the test are communicated to the person 
who gave their consent to the test.^^^ This means 
that it is unlawful for third parties, such as 
employers, to request that test results be sent to 
them. 



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5.2 Counselling 

Regardless of whether the result of the HIV test is 
positive or negative, post-testing support must be 
offered 



358 



For a negative HIV test result, post-testing support 
includes information regarding the nature of HIV 
and AIDS, infection prevention methods, the 
window period between infection and positive test 
results and the desirability of repeating the test at 
a later date. 

A positive HIV test result requires more 
substantial post-testing support including 
information about the nature of HIV and AIDS, the 
associated legal and social issues, treatment 
options, transmission prevention methods, and 
the desirability of informing sexual partners. This 
also includes informing the person of actions that 
may be taken to inform the sexual partner of the 
test result. 

The National Strategic Plan for HIV/AIDS 2006- 
201 identifies counselling as one of the priority 
pillars for addressing the HIV/AIDS epidemic in 
Papua New Guinea. The Government has 
recognised the important role that organisations 
can play in setting up community care facilities, 
extending voluntary counselling out from simply 
the clinical setting. 

5.3 Reporting 

It is imperative that any test results received or 
obtained by an organisation are kept confidential. 

An HIV test that returns a positive result must be 
reported to the national Database Manager and to 
the person requesting the test, but to no other 

359 

person. 

An exception to this restriction exists for the 
notification of sexual partners. ^^° This section will 
only apply to organisations where the organisation 
is providing treatment, care or counselling to a 
person infected with HIV. 

PARTNER NOTIFICATION PROCEDURES 
This note applies to organisations involved in the 
treatment, care or counselling of HIV-infected 
persons. 

Under the HAMP Act, in certain circumstances the 
sexual partner of a person infected with HIV may 
be notified that their partner is HIV positive. 

A sexual partner may be notified where the 
infected person has requested that the sexual 
partner be notified. 



A sexual partner may also be notified where, in 
the opinion of the notifying person (such as doctor 
or an appropriate HIV organisation employee 
authorised under the organisation's policy): 

■ counselling of the infected person has failed 
to achieve appropriate behaviour change; and 

- the infected person has refused to notify, or 
consent to the notification of, the sexual 
partner; and 

■ there is a real risk of transmission of HIV by 
the infected person to the sexual partner. 

If a sexual partner is to be notified, the identity of 
the infected person must be concealed from the 
sexual partner so far as possible, and upon 
informing the sexual partner, the notifying person 
must offer appropriate counselling to the sexual 
partner. 

5.4 Confidentiality 

The HAMP Act contains strict confidentiality 
requirements about a persons' HIV/AIDS status or 
association with others infected with HIV or having 
AIDS. 

The HAMP Act requires that in certain 
circumstances a person must take all reasonable 
steps to prevent the disclosure of information 
regarding another who: 

■ is (or is presumed to be) infected by HIV or 
has AIDS; 

■ is being (or has refused to be) tested for HIV; 
or 

■ is associated or related with a person who is 
(or is presumed to be) infected by HIV or has 
AIDS.^^^ 

This obligation is confined to situations in which 
the information is acquired in a professional 
capacity. Both volunteers and employees of 
certain organisations are likely to be captured by 
these obligations. 

In particular, these obligations extend to paid and 
unpaid workers of organisations that: 

■ are involved or associated with the provision 
of HIV testing, treatment, care, counselling or 
associated health services; or 

■ obtained the information whilst being present 
during an investigation, inquiry or hearing of a 
matter under the HAMP Act. 



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6 Ensuring your organisation 
complies witin tine HAMP Act 

The HAMP Act also creates offences for 
individuals who recklessly or intentionally transmit 
or attempt to transmit HIV. These sections extend 
the applicability of the Criminal Code Act to HIV 
offences such as unlawful killing and assault 
occasioning bodily harm. Mother to child 
transmission is not unlawful under the Act. 



Listed below are some practical suggestions of 
measures to take to assist your organisation to 
comply with its obligations under the HAMP Act. 

These may or may not be appropriate for your 
organisation, and are intended to be general 
guidance only. These suggestions must be 
adapted according to the circumstances of your 
organisation. 







HAMP Act obligations 
generally 


■ Establish an officer who is responsible for compliance with the HAMP Act 
and for all HIV/AIDS related matters. 

Establish a comprehensive HIV/AIDS policy which sets out the 
organisation's and employees' obligations and standards of conduct in 
relation to HIV/AIDS and the HAMP Act. 

Include as part of employee induction and training an overview of the 
HAMP Act and the organisation's HIV/AIDS policy, particularly the 
obligations of the organisation and the individuals. 


To not discriminate 


If it is not essential for the organisation to know, do not inquire as to the 
HIV status of a person. 

Establish a clear policy that states that unlawful discrimination is not 
permitted and sets out what will happen in the event that a person is 
discriminated against. 


To not coerce a person to 
undergo an HIV test 


Ensure that the HIV/AIDS policy prohibits a person being required to 
undergo a HIV test. 


To not stigmatise a 
person affected by or 
infected with HIV/AIDS 


Establish a communications policy which requires that prior to being 
released, all materials produced and distributed by the organisation and 
all public communications by the organisation and its employees are 
reviewed (preferably by a HIV/AIDS Officer) specifically for any potential 
stigmatisation. 


To not deny persons 
access to means of 
protection from HIV 


■ If the organisation provides means of protection from HIV/AIDS to 

persons, establish and enforce a policy that people will be given access to 
such protections without discrimination (unless there is a reasonable 
excuse). 


Testing 


If the organisation requests or conducts testing, establish a policy that 
complies with the testing requirements in the HAMP Act. 


Counselling 


■ Include an outline of the counselling requirements in the training/induction 
of employees involved with testing of persons. 


Confidentiality 


Ensure that either the HIV/AIDS policy or a confidentiality policy covers 
the confidentiality requirements of the HAMP Act. 
Hold all records that are subject to confidentiality in a locked filing cabinet. 
Only selected key personnel should have access to the records. 
Require persons who want to access records to submit reasons as to why 
they need access, and keeping records of people who access the 
relevant records. 



RESOURCES 

HIV/AIDS Management and Prevention Act 2003 



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Child protection 



Papua New Guinea has recently amended and updated its child protection laws with a 
view to complying with the United Nations' Convention on the Rights of the Child (CROC). 

The primary legislation governing child welfare is now the Lukautim Pikinini (Child) Act 
2009 (LPCA). This piece of legislation prioritises the rights and interests of children as 
paramount considerations when making decisions about their protection and welfare. 

This section outlines the responsibilities your organisation may have when it deals with 
children, including as employees. 




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1 The guiding principles of 
cilild protection laws 

The LPGA expresses eleven key objectives that 
assist in its interpretation and in making decisions 
about child protection. The objectives include: 

■ to provide services and methods for 
promoting the sound physical, mental, 
emotional and social development of children; 

■ to provide assistance to parents in the 
performance of their parental responsibilities 
in order to ensure protection for the safety, 
welfare and development of children; 

■ to protect and promote the rights of children; 

■ to prevent the ill-treatment, abuse, exploitation 
and neglect of children; 

■ to strengthen community structures for the 
protection and care of children; and 

■ to foster collaboration with organisations 
engaged in the provision of services designed 
to promote the well-being of children, families 



and communities 



362 



The interpretation rules in the LPGA also require 
that all actions and decisions made under the Act 
concerning a child are made with the best 
interests of the child as the paramount 
consideration 



363 



Where a decision is to be made under the LPGA 
with respect to a child, the Director of Lukautim 
Pikinini must provide the child with accessible and 
sufficient information regarding the decision, its 
reasoning and the way in which the child may 
participate in the decision making process, 
including the opportunity to respond to any 
decision made concerning the child. ^^"^ 

Organisations developing programs or making 
decisions relating to children and their protection 
should make efforts to follow these same 
procedures to involve and/or inform the child in 
the decision making process. 



WHAT ARE THE BESTS INTERESTS OF THE 
GHILD? 

The best interests of the child are central to the 
operation of the LPGA. While they only apply to 
decision making under the LPGA, the non- 
exhaustive criteria provided in the LPGA should 
be seen as a best practice model for 
organisations making decisions relating to 
children and ensuring that their best interests are 
paramount. 

In determining the best interests of the child, the 
decision maker should have regard to: 

■ the importance of a positive relationship with a 
parent or guardian and a secure place as a 
member of a family for the child's 
development; 

■ the child's relationship with relatives; 

■ the importance of continuity in the child's care; 

■ the bond between a child and their parent or 
guardian; 

■ the child's physical, mental and emotional 
needs; 

■ the child's level of physical, emotional and 
mental development; 

■ the child's cultural, racial and linguistic 
heritage; 

■ the child's views and wishes; and 

■ the degree of risk of harm that the child may 
suffer. 



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2 The scope of child protection 
laws 

In compliance with international conventions, the 
LPCA considers persons under the age of 1 8 
years to be children. 

First and foremost, the LPCA enshrines the right 
of a child to exercise or demand the exercise of all 
of the rights set out in any domestic laws and the 
CROC, whilst imposing duties on parents, 
guardians and any person having custody of a 
child to maintain and protect that child. These 
obligations include giving a child the right to an 
adequate diet, immunisation, clothing, shelter, 
education and medical attention. 

In addition, a duty to protect the child from 
discrimination, violence, abuse, neglect, and 
exploitation is imposed on parents, guardians and 
any person having custody of a child. Parental 
responsibility is an important factor under the 
LPCA, with the duty of parental responsibility 
being passed onto or assumed by relatives in 
accordance with custom, a direction by the 
Director of Lukautim Pikinini or by a court order. 

Further protection is granted through the 
restrictions under the LPCA on the people that 
can work with children. Child care centres must 
be licensed, and persons with a criminal record 
are not permitted to engage in child related 
employment. 



3 Obligations on organisations 
employing children 

For organisations considering engaging children 
in employment, as interns or as volunteers, the 
child employment laws require special 
consideration. 

Generally, children between the ages of 15 and 
18 may be engaged in part-time or temporary 
employment, or unpaid work to raise moneys to 
reasonably contribute towards their own 
development and that of their family. ^®^ 
Employing a child for paid or unpaid work, must 
be approved for specific periods by the Director of 
Lukautim Pikinini.^®® Potential employers, 
including organisations, who wish to employ 
children, must submit certain details about the 
employment proposal to the Director of Lukautim 



367 



Pikinini. Failure to do so may result in a fine of 
up to K2,000 or six months imprisonment. 



368 



Additionally, it is unlawful to employ or otherwise 
engage a child in any activity that may be harmful 
to their health, education, mental, physical or 
moral development, or well-being. 

Papua New Guinea laws also protect children 
against child labour. It is an offence for a person 
to cause or permit a child to be engaged in 
employment in conditions that are likely to be 
hazardous to the child, interferes with the child's 
education or is harmful to the health or physical, 
mental, spiritual or social development of the 
child. This offence carries a maximum fine of 
K5,000 and/or 5 years imprisonment. 

Parents or caregivers who aid or abet a person to 
engage in such conditions, is also guilty of an 
offence with the same maximum penalties. 
Employers that allow child labour or employment 
under such conditions face penalties of up to 
K1 0,000 and/or 10 years imprisonment. 

For further information on employment law, see 
the Employment section. 



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4 Obligations on all 
organisations that come into 
contact with children 

4.1 The duty to provide for children 

There are also a number of obligations on 
persons to provide for children. These obligations 
may apply to organisations and their people who 
come into contact with or have responsibility for 
children. 

FAILURE TO PROVIDE 

It is an offence for a person to fail to provide 
(without a reasonable excuse) adequate and 
proper food, clothing, lodging, medical aid, 
education, protection and welfare for a child under 
their care, regardless of whether or not they are 
the child's parent 



369 



The penalty for failing to provide is a fine of up to 
K2,000 and/or 12 months imprisonment. 

ILL TREATMENT OF CHILDREN 

A person is guilty of an offence carrying a penalty 
of a fine of K2,000 and/or imprisonment for 2 
years if the person's conduct results in, or 
appears likely to result in, or they should have 
known would result in: 

■ the physical injury or sexual abuse of a child; 
or 

■ a child suffering emotional or psychological 
harm of such a kind that the emotional and 
intellectual development of the child is, or is 
likely to be, sufficiently damaged; or 

■ the physical development or health of a child 
being significantly harmed; or 

■ a child suffering from discrimination.^^" 

FAILURE TO DISCHARGE DUTIES 

Papua New Guinea law imposes a series of duties 
on all parents or those having custody of a child in 



relation to caring for their children 
include the duty to: 



371 



These 



safeguard and promote the child's health, 
development and welfare; 

provide education and guidance in manner 
appropriate to the child's stage of 
development; 



■ ensure the child receives adequate diet, 
clothing, shelter, immunisations and medical 
attention; 

■ protect the child from discrimination, violence, 
abuse, neglect, exploitation and harmful social 
or customary practices; and 

■ protect the child from engaging in employment 
or any activity that may be harmful to the 
child's health, education, mental, physical or 
moral development. 

Failure to discharge these duties initially results in 
an inquiry and imposition of arrangements to 
remedy the failure by the Director of Lukautim 
Pikinini. Continued failure carries penalties, 
including imprisonment. ^^^ 




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120 
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4.2 The duty to report where a child is in 
need of protection 

There is a general duty on members of the public 
to report that a child is in need of protection to the 
Director of Lukautim Pikinini.^^^ As part of this 
there is a prohibition on taking the reporting 
person to court for making such a report, as long 
as the reporting person has acted in good faith 
There is no defence, however, for malicious 
reporting, which may attract additional penalties 
including imprisonment 



374 



5 Organisations that have 
responsibility for children 

in order to monitor the provision of child care 
services, centres established for the care of 
children under seven years old, or early childhood 
and development services for those under seven, 
must hold a licence granted by the Director of 
Lukautim Pikinini 



378 



375 



Professionals who work with children have a 
statutory duty to report to the Director of Lukautim 
Pikinini if they believe that a child is in need of 
protection. ^^^ Professionals include physicians, 
health care professionals, nurses, aid post worker, 
dentists, lawyers, social workers, teachers, school 
principals, police officers, members of the clergy, 
community officers or an operator or employee of 
a child-minding centre or service 



377 



RESOURCES 

Lukautim Pikinini (Child) Act 2009 



Organisations that wish to establish and operate 
child care centres for children under seven years 
old, must apply for a licence and ensure that it 
complies with all of the stipulated conditions and 
requirements under the LPCA. 

Applications for a licence must be accompanied 
with a range of documentation such as a medical 
practitioner's report, a police criminal record 
report, reference from a church leader, village or 
ward councillor, and safety reports on the 
proposed child care centre site, in order to 
demonstrate the fitness of the applicant and the 
safety of the proposed child care centre 



379 



Licensed centres must maintain a register of the 
details of children under its care which records the 
movement of children into and out of its care,^^° 
and centres are inspected by Child Protection 
Officers to ensure compliance. A range of 
offences, including jail, exist for failure to comply 
with these provisions. 




©Josh Estey/CARE 



Your Operations 



121 
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GOVERNMENT 
DEPARTMENT DIRECTORY 



5 Government Department 
Directory 

Set out below are the contact details for 
several key government agencies referred 
to in this handbook. 

Please note that these details have been 
obtained from the department websites as 
at the time of printing, and may change 
over time. 

Typically, government agencies and 
departments are open from 8:00am to 
4:06pm, Monday to Friday. 

Internal Revenue Commission 

The IRC has over 350 offices across PNG. Its 
headquarters is in Port Moresby at Revenue Haus, 
Bogan Gapo Building, Downtown, Port Moresby. 

Postal Address 

The Commissioner General 
Internal Revenue Commission 
PO Box 777 
Port Moresby 121 
National Capital District 

Phone 

+675 322 6600 

Fax 

Fax: +675 321 7621 

Website 

http://www.irc.gov.pg/index.html 

Intellectual Property Office 

Office Location 

IPAHaus, 1st Floor 

Muniduba Street (Corner of Lawes Road & 

Champion Parade) 

Konedobu, Port Moresby 

National Capital District 

Phone 

+675 308 4432 / 321 731 1 

Fax 

+675 321 5155 



Website 

http://www.ipopng.gov.pg 

Email 

registrar.ipopng@ipa.gov.pg 

Department of Labour and 
Industrial Relations 

For information or to apply for work permits for 
foreign workers, contact the Foreign Employment 
Division. 

Office Location 

Moale Haus, Melanesian Way 

Waigani 

National Capital District 

(Located with the Department of Immigration and 

Citizenship Services) 

Postal Address 

PO Box 5644 

Boroko 

National Capital District 

Telephone 

+675 323 5758 / 325 291 1 

Fax 

675 325 6655 

Website 

http://www.workpermits.gov.pg/ 

Email 

enquiries@wo rkpermits.gov. pg 



Government Department Directory 



123 
© King & Wood Mallesons 



Department of Immigration and 
Citizenship Services 

Postal Address 

The Chief Migration Officer 

PNG Immigration and Citizenship Service 

PO Box 1 790 

Boroko 

National Capital District, 

Telephone 

+675 323 1 500 
Fax 

+675 325 5206 
Website 

http://www.immigration.gov.pg/ 

Department of Health 

Office Location 

Aopi Centre 
Waigani Drive 
Port Moresby 
National Capital District 

Postal Address 

PO Box 807 

Waigani 

National Capital District 

Telephone 

+675 301 3952/301 3748 

Fax 

+675 325 0279 

Email 

hfs@datec.net.pg / healthsec@health.gov.pg 

National AIDS Council 

Postal Address 

PO Box 1345 

Boroko 

National Capital District 

Telephone 

+675 3236161 
Fax 

+675 3231619 



Website 

http://www.nacs.org.pg 
Email 
nacs@nacs.org. pg 

Department of Community 
Development 

Office Location 

Sambra Investment House 

Kumul Avenue 

Waigani 

National Capital District 

Postal Address 

PO Box 7354 

Boroko 

National Capital District 

Telephone 

+675 325 0120 
Fax 

+675 325 0118 

Investment Promotion Agency 

The I PA has offices in Port Moresby, Lae, Buka, 
Kokopo and Mt Hagen. 

Postal Address 

PO Box 5053 

Boroko 

National Capital District 

Telephone 

+675 321 3900 / 321 731 1 / 342 5093 

Fax 

+675 321 3049 

Website 

http://www.ipa.gov.pg/ 

Email 

ipa@ipa.gov.pg 



Government Department Directory 



124 
© King & Wood Mallesons 



Registrar of Companies 

The Registrar of Companies is part of tine I PA. See 
tine IPA contact details above. 

Postal Address 

Investment Promotion Autinority 

Business Registration & Regulation Division 

PO Box 1281 

Port Moresby 

National Capital District 

Telephone 

+675 321 3900 

Fax 

+675 321 3049 

Email 

brr@ipa.gov.pg 



Independent Consumer and 
Competition Commission 

Postal Address 

1st Floor, Garden City, Angau Drive 

PO Box 6394 

Boroko 

National Capital District 

Telephone 

+675 325 2144 

Fax 

+675 325 3980 

Email 

info@iccc.gov. pg 
Website 

http://www.iccc.gov.pg/ 



Co-operative Societies Unit 

Office location 

Ground Floor, Moale Haus 

Sir John Guise Drive 

Waigani 

National Capital District 

Postal Address 

Co-operative Societies Unit 

POBox 1214 

Boroko 

National Capital District 

Telephone 

+675 323 4806 / 323 5320 

Fax 

+675 323 5422 

Website 

http://www.csu.gov.pg/ 

Email 

info@csu.gov.pg 



Government Department Directory 



125 
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REFERENCES 



^ Photo credits: front cover © CARE; cover pages for parts 1 -4 ©Josh Estey/CARE. 

^ See John Mugambwa et al, Commercial and Business Organisations Law in Papua New Guinea (2007). 

^ See John Mugambwa et al, Commercial and Business Organisations Law in Papua New Guinea (2007). 

^ Associations Incorporation Act 1966, s33. 

^ Associations Incorporation Act 1966, s34. 

^ Associations Incorporation Act 1966, si 3. 

^ Associations Incorporation Act 1966, s14. 

^ Associations Incorporation Act 1966, s23. 

^Associations Incorporation Act 1966, s1(1). 

^"Associations Incorporation Act 1966, s1(1). 

" Associations Incorporation Act 1966, ss2(1) and 4(1 )(a). 

^^ Associations Incorporation Act 1966, s2. 

^^ PNG Institute of Directors, Setting up an Incorporated Association 
<http://www.pngid.org.pg/incorporated_associations.html>. 

^^ Associations Incorporation Act 1966, s8(1). 

^^ Associations Incorporation Act 1966, s4. 

^^ Associations Incorporation Act 1966, s4. 

^^ Associations Incorporation Act 1966, s8. 

^^ Associations Incorporation Act 1966, s25. 

^^Associations Incorporation Act 1966, s6(4)(a). 

^° Associations Incorporation Act 1966, si . 

<http://www.pngid.org.pg/Jncorporated_associations.html> 

^^Associations Incorporation Act 1966, s6(3)(b). 

^^ A Statutory Declaration can be made before a District Officer, magistrate or a clerk of court, a 
Commissioner for Oaths (which includes any lawyer with a current practising certificate), or a Notary Public: 
Oaths, Affirmations and Statutory Declarations Act 2000 ssl 1 , 12A and 13; Lawyers Act 1986 si 08. A 
Statutory Declaration should be made using Form 1 1 of the Oaths, Affirmations and Statutory Declarations 
Act 2000. 

^"^ Associations Incorporation Act 1966, s6(3). 

^^ Associations Incorporation Act 1966, s6(5). 

^® Associations Incorporation Act 1966, s7. 

^^ This must be carried out in accordance with section 31 of the Associations Incorporation Act 1966 and the 
provisions of Parts XVIII and XIX of the Companies Act 1997. 

^® Associations Incorporation Act 1966, s33. 

^® Associations Incorporation Act 1966, s34. 

^° Associations Incorporation Act 1966, si 6; Schedule 1 . 

^^ Associations Incorporation Act 1966, si 6; Associations Incorporation Regulation 1966, reg 8. 

^^ Trustees and Executors Act 1961 , ss3, 9, 13, 14 and 20. 

References 1 26 

© King & Wood Mallesons 



33 



Companies Act 1 997, s1 71(1). 



^^ Companies Act 1 997, ssl 90(2) and 201 . 

^^ Companies Act 1997, s390. 

^® Companies Act 1997, s391 . 

^^ Companies Act 1 997, s291 . 

^® Companies Act 1 997, si 2. 

^^ Companies Act 1 997, si 1 . 

'^° Companies Act 1 997, si 1 . 

'^^ Companies Act 1997, s383. 

'^^ Companies Act 1997, s382. 

'^^ Companies Act 1 997, si 3. 

'^'^ Companies Act 1997, s29. 

'^^ Companies Act 1 997, si 4. 

'^^ Companies Act 1997, s291 . 

'''^ Co-operative Societies of PNG at www.csu.gov.pg/. 

"^^ Co-operative Societies of PNG at www.csu.gov.pg/. 

"^^ Co-operative Societies of PNG at www.csu.gov.pg/. 

^° Co-operative Societies Act 1 982, s31 . 

^^ Co-operative Societies Act 1982, s76. 

^^ Co-operative Societies Act 1982, s70. 

^^ Co-operative Societies Act 1 982, s84. 

^^ Co-operative Societies Act 1 982, s85. 

^^ See, for example. Co-operative Societies Act 1 982, si 2: tine Registrar has tine power at any reasonable 
time to inspect documents and records of the SC and examine and count money and other securities. 

^^ Co-operative Societies Act 1 982, s21 . 

^^ Note the name of the society needs to include 'Co-operative' or 'Co-op' and needs to end in 'Limited' or 
'Ltd: Co-operative Societies Act 1982, s32. 

^® Co-operative Societies Act 1982, s22. 

^® Co-operative Societies Act 1982, s51. 

®° Co-operative Societies Act 1982, s23(b). 

®^ Co-operative Societies Act 1982, ss 27(1), 31 and 60. 

^^ Co-operative Societies Act 1982, s25(d). 

^^ Co-operative Societies Act 1982, s23(c)-(d). 

^^ Co-operative Societies Act 1 982, s30. 

®^ Co-operative Societies Act 1982, s26(c). 

®® Investment Promotion Authority (IPA) PNG 

®^ Business Groups Incorporation Act 1 974, si 1 . 

®® Business Groups Incorporation Act 1974, si 8. 

References 1 27 

© King & Wood Mallesons 



69 



See Business Groups Incorporation Act 1974, s11(b). 



^° Business Groups Incorporation Act 1974, ss12 and 13. Forms can be downloaded from the Investment 
Promotion Authority: www.ipa.gov.pg. 

^^ If your organisation is an 'Incorporated Association', the committee must consist of 2 or more people. 

^^ Income Tax Act 1959, s46(1). A company, incorporated association or co-operative society will generally 
be considered a PNG resident for the purposes of income tax if it (a) is incorporated in PNG; or (b) carries on 
business in PNG and has either its central management and control in PNG or its voting power controlled by 
shareholders who are residents of PNG: Income Tax Act 1959, s4(1). 

^^IncomeTax Act 1959, s11(2)(b). See further Part 1.4 below. 

^"^ Income Tax Act 1959, ss25, s 25A and s 27. 

^^ Income Tax Act 1959, s4(1). 

^® Income Tax Act 1959, s45B. 

^^ Income Tax Act 1959, s45G. 

^^ Income Tax Act 1959, s68(1). 

^® Income Tax Act 1959, s68(2). 

®° Income Tax Act 1959, s69E. 

®^ Income Tax Act 1959, s68(9). 

®^ Income Tax Act 1959, s90. 

®^ Income Tax Act 1959, s72. 

^'^ Income Tax Act 1959, s89. 

®^ Income Tax Act 1959, s85. 

®^ Income Tax Act 1 959, ss73-84 and ss1 01 -1 01 H. 

®^ If the property was acquired no more than 12 months before it was given. 

®® In special cases, the beneficiary may be entitled to a credit, for example where the beneficiary is presently 
entitled to a distribution, but the distribution has not in fact been made: see Income Tax Act 1959, s 132, 
si 33. 

®^ Income Tax Act 1959, si 35; Income Tax (Rates) Act 1976, schedule 3.2. 

^° Income Tax Act 1959, si 24. 

^^ Income Tax Act 1959, si 25. 

^^ Income Tax Act 1959, si 23. 

^^ Fiscal Year (Change) Act 1977. 

'^^ Income Tax Act 1959, s31 1 AG. 

^^ Income Tax Act 1 959, s31 1 AD. 

^^ Income Tax Act 1959, s275N. 

^^ Income Tax Act 1 959, ss275N and 31 1 AF. 

^® Income Tax Act 1 959, ss2750 and 31 1 AG. 

^^ Income Tax Act 1959, s223; Income Tax Regulation 1959, Part IV; National Gazette No. G44 - 15 



February 201 1 : Lodgement of Income Tax Returns. 

100 |„ „ 

Incon^ 
Returns. 



^°° Income Tax Act 1 959, s31 3; National Gazette No. G44 - 1 5 February 201 1 : Lodgement of Income Tax 



References 1 28 

© King & Wood Mallesons 



101 



Income Tax Act 1959, s228. 

Income Tax Act 1959, s234. 

Income Tax Act 1959, s245. 

Income Tax Act 1959, s247. 

Income Tax Act 1959, s255. 

Income Tax Act 1959, s258. 

Income Tax Act 1959, s25. 

Income Tax Act 1959, s25A. 

Income Tax Act 1959, s27. 

Income Tax Act 1959, s11(2), si 6. 

"^ IncomeTax Act 1959, Part III Div IB. 

^^^ The full list of rural development areas and the designated industries is contained in regulation 6AA of the 
IncomeTax Regulation 1959. 



102 



103 



104 



105 



106 



107 



108 



109 



110 



113 



115 



116 



117 



118 



119 



122 



123 



124 



Income Tax Act 1959, s19B. 
Goods and Services Tax Act 2003 
Goods and Services Tax Act 2003 
Goods and Services Tax Act 2003 
Goods and Services Tax Act 2003 
Goods and Services Tax Act 2003 
Goods and Services Tax Act 2003 
' Goods and Services Tax Act 2003 
Goods and Services Tax Act 2003 
Goods and Services Tax Act 2003 
Goods and Services Tax Act 2003 
Goods and Services Tax Act 2003 



^^^ Goods and Services Tax Act 2003 
^^^ Goods and Services Tax Act 2003 



127 



128 



129 



130 



Goods and Services Tax Act 2003 
Goods and Services Tax Act 2003 
Goods and Services Tax Act 2003 
Goods and Services Tax Act 2003 



^^^ Goods and Services Tax Act 2003 
^^^ Goods and Services Tax Act 2003 

133 



' Goods and Services Tax Act 2003 



s26. 

ss6 and 8. 

ss30 - 31 

s43. 

s95. 

s63. 

s91. 

s30and31. 

s27(1). 

ss31(3)and31(10). 

s28. 

ss31(3) and 31(10). 

s43(8). 

s39. 

s21(1)(c). 

s21(1)(a). 

ss11(13)(d)and(e). 

s25(5). 

s21(1)(e). 

s2(1). 



134 



135 



136 



137 



Income Tax Act 1959, ss280(1)(a) and 280(9). 
Income Tax Act 1959, s280(1)(b). 
Income Tax Act 1959, ss280(6)-(8). 
Income Tax Regulation 1959, reg IOC. 



References 



129 
© King & Wood Mallesons 



^^® Income Tax Act 1959, ss276A(2) and 276(1). 

^^^ Income Tax Act 1959, s276A. 

^'*° Income Tax Act 1959, s354L. 

^^^ Income Tax Act 1959, ss354N and 3540. 

^^^ Income Tax Act 1959, s278. 

^^^ Income Tax Regulation 1959, reg 55. 

^'*'* Income Tax Act 1959, s280(1)(b). 

^^^ Income Tax Act 1959, ss280(1)(f) and 354N(3). 

^'*® Income Tax Act 1959, Part III Div 14D. 

^"^^ Stamp Duties Act 1952. 

^■*® Customs Tariff Act 1990. 

^"^^ Eg Income Tax Act 1959, Part III Divs 13, 13A. 

^^° Income Tax Act 1959, Part III Div 17. 

^^^ Income Tax Act 1959, s25. 

^^^ Income Tax Act 1959, s25A. 

^^^ Income Tax Act 1959, s27. 

^^'^ Income Tax Act 1 959, ss1 1 (2) and 1 6. 

^^^ Wrongs Miscellaneous Provisions Act 1 975, Part XII provides that occupiers of land or premises owe a 
duty of care to visitors for dangers resulting from the state of the premises or things done or failed to be done 
on the premises. 

^^^ Motor Vehicles (Third Party Insurance) Act 2002, s 48. 

^^^ Insurance Act 1 995, ss1 7 and 1 9 make it an offence to operate a general insurance business, or act as a 
broker or loss adjustor without a licence. 

^^® Insurance Act 1995, s47. 

^^^ Wrongs (Miscellaneous Provisions) Act 1975, s2. 

^^° Discriminatory Practices Act 1963. 



161 



Employment of Non-Citizens Act 2007 and Employment of Non-Citizens Regulation 2008. 



^^^LPCA, s94(1). 
^®^ LPCA, s94(2). 
'^' LPCA, s94(4). 
^®^ Employment Act 1 978, ssl 03, 1 04 and 1 05. 



166 



Constitution of the Independent State of Papua New Guinea, s51(c). 



^®^ Employment Act 1 978, s1 4. 

^^^ See Department of Labour and Employment Industrial Relations Act, Minimum Wages Board 
Determination No. 1 of 1992. 

^^^ Superannuation (General Provisions) Act 2000. 

™ Employment Act 1 978, s49. 

^^^ Employment Act 1 978, s50. 

^^^ Employment Act 1 978, s51 . 

References 1 30 

© King & Wood Mallesons 



^^^ Employment Act 1 978, s49(2). 

^'"' Employment Act 1 978, s58. 

^^^ See Employment Act 1978, s98. 

^^® Employment Act 1 978, s99. 

^~'~' Employment Act 1 978, s1 00. 

^^® Employment Act 1 978, s1 00(1 )(a). 

^^^ Employment Act 1 978, si 00(1 )(b). 

^®° Employment Act 1 978, si 00(c). 

^®^ Employment Act 1 978, si 00(c). 

^^^ Employment Act 1 978, si 00(2). 

^®^ Employment Act 1 978, si 02. 

^^^ Employment Act 1 978, si 01 . 

^®^ Employment Act 1 978, si 01 (2)(b). 

^®® Industrial Safety, Health and Welfare Act 1961, s2; Workers Compensation Act 1978. si. 

^®^ Wilhelm Lubbering v Bougainville Copper Limited [1977] PNGLR 183. 

^^^ Karawari Lodge Pty Ltd v Bernard Luck (1998) SC 553. 

^^^ Edwards v Jordan Lighting [1 978] PNGLR 273; Colbert v State of Papua New Guinea [1 998-89] PNGLR 
590. 

^^° Edwards v Jordan Lighting [1 978] PNGLR 273. 

^^^ See Industrial Safety, Health and Welfare Act 1961, ss35 - 41; Industrial Safety, Health and Welfare 
Regulation 1965 regs 20 - 67. 

^®^ Industrial Safety, Health and Welfare Act 1961, si 0. 

^^^ Workers Compensation Act 1978, s54(1). 

^^"^ Workers Compensation Act 1978, ss54(2) - (3). 

^^^ Workers Compensation Act 1 978, s42. 

^^® Employment Act 1 978, s27. 

^^^ Income Tax Act 1959, s299D. 



198 
199 
200 
201 
202 
203 
204 
205 
206 
207 
208 



ncome Tax Act 1 959, s299G(1 ); Income Tax (Salary or Wages) (Rates) Act 1 979, schedule 1 , table A. 

ncome Tax Act 1959, s299G(1). 

ncome Tax Regulation 1959, reg 66A. 

ncome Tax Regulation 1959, reg 66A. 

ncome Tax Act 1959, s299G(4). 

ncome Tax Regulation 1959, reg 66E. 

ncome Tax Regulation 1959, reg 66F. 

ncome Tax Act 1959, s299G. 

ncome Tax Act 1959, s4(1). 

ncome Tax Act 1959, s19B. 

ncome Tax Act 1959, s65E. 



References 131 

© King & Wood Mallesons 



^°^ Income Tax Act 1959, s46B. 

^^° Income Tax Regulation 1959, reg 66E. 

^" Income Tax Act 1959, s299G(4). 

^^^ Income Tax Regulation 1959, reg 66CA. 

^^^ Income Tax Act 1 959, s4(1 ). 

^^"^ Eg for Australian citizens see the Agreement between Australia and the Independent State of Papua New 
Guinea for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on 
Income [1989] PITSE 5 (24 May 1989). 

^^^ Employment Act 1 978, s34. 

^^® Employment Act 1 978, s36(1 ). 

^^^ Porger Joint Venture Manager Placer (PNG) Ltd and Robin Kami (2010) SGI 060. 

^^® Porger Joint Venture Manager Placer (PNG) Ltd and Robin Kami (2010) SGI 060. 



219 



Employment Act 1 978, s36(2). 



^^° Discriminatory Practices Act 1963, s1 'discriminatory practice'. 

^^^ HIV/AIDS Management and Prevention Act 2003, s7. 

^^^ Discriminatory Practices Act 1963, si licence'. 

^^^ Discriminatory Practices Act 1963, s3(a). 

^^"^ Discriminatory Practices Act 1963, s3(b). 

^^^ Discriminatory Practices Act 1963, s3. 

^^^ Discriminatory Practices Act 1963, s4. 

^^^ Discriminatory Practices Act 1963, s4. 

^^^ Discriminatory Practices Act 1963, s4. 

^^^ HIV/AIDS Management and Prevention Act 2003, s6. 

^^° HIV/AIDS Management and Prevention Act 2003, s7. 

^^^ HIV/AIDS Management and Prevention Act 2003, slO. 

^^^ HIV/AIDS Management and Prevention Act 2003, s2(1) 'stigmatise'. 

^^^ Employment Act 1978, s97. 

^^"^ Discriminatory Practices Act 1963, ssl 'licence' and 2. 

^^^ Discriminatory Practices Act 1963, si licence'. 

^^^ Discriminatory Practices Act 1963, si 'discriminatory practice'. 

^^^ Discriminatory Practices Act 1963, s2. 

^^® Discriminatory Practices Act 1963, s3(a). 

^^^ Discriminatory Practices Act 1963, s3(b). 

^'*° Full list of licences' under Discriminatory Practices Act 1963, si. 

^'^^ Discriminatory Practices Act 1963, s2(1). 

^"^^ Discriminatory Practices Act 1963, s6(1). 

^"^^ Discriminatory Practices Act 1963, s3. 

^^"^ Discriminatory Practices Act 1963, s6(1). 



References 1 32 

© King & Wood Mallesons 



^'^^ Discriminatory Practices Act 1963, s4. 

^'*® Discriminatory Practices Act 1963, s6(1). 

^" Discriminatory Practices Act 1963, s4. 

^^^ Discriminatory Practices Act 1963, s4. 

^■^^ HIV/AIDS Management and Prevention Act 2003, s27. 

^^° HIV/AIDS Management and Prevention Act 2003, s27. 

^^^ HIV/AIDS Management and Prevention Act 2003, s 27. 

^^^ Employment Act 1 978, s97. 

^^^ Customary owners are prohibited from selling or leasing their land to private citizens (except in 
accordance with custom): Land Act 1996, si 32. Further, the State no longer grants freeholds of land (that 
means, the government does not grant land that people can buy outright). 

^^"^ Land Act 1 996, s92. 

^^^ Land Act 1996, si 04. 

^^^ Land Act 1996, si 00. 

^^^ Land Act 1996, s96. 

^^^ Land Registration Act, s36. 

^^^ Land Act 1996, si 32. 

^®° Frauds and Limitation Act 1988, s2(1)(a)(i) prescribes that an interest in land cannot be created or 
transferred except by writing signed by the person creating the interest or his or her duly authorised agent. A 
lease is an interest in land: Radiach v Smith (1959) 101 CLR 209. 

^^^ Land Registration Act 1981 , s49. 

^®^ Land Registration Act 1 981 , s49(2). 

^®^ Land Registration Act 1 981 , s33. 

^^'^ Land Act 1996, si 29. 

^^^ Stamp Duties Act 1952. 

^®® Summary Ejectment Act 1952, s4. 

^®^ Land Registration Act 1 981 , s55. 

^^^ Land Act 1996, si 29. 

^®® Land Registration Act 1981 , ss55 and 56. 

^^° "What is Intellectual Property?" WIPO Publication No. 450(E) ISBN 978-92-805-1555-0 

^^^ Copyright and Neighbouring Rights Act 2000, ss4 and 5. 

^^^ These economic and moral rights are protected during the author's life and for 50 years after his or her 
death: Copyright and Neighbouring Rights Act 2000, ss6, 7 and 1 7. 

^^^ Copyright and Neighbouring Rights Act 2000, si 7. 

^^"^ Copyright and Neighbouring Rights Act 2000, s7. 

^^^ Copyright and Neighbouring Rights Act 2000, ss8 to 15. 

^^® Copyright and Neighbouring Rights Act 2000, s25. 

^^^ Trade Marks Act 1 978, ss1 5 and 16. 

^^® Trade Marks Act 1 978, si 7. 

References 1 33 

© King & Wood Mallesons 



279 



The lists of classes are contained in Schedule 3 of the Trade Marks Regulation 1979. 



^^° See the Intellectual Property Office PNG website, www.ipopng.gov.pg/. 

^^^ Trade Marks Regulation 1979, Schedule 4. 

^^^ See the Intellectual Property Office PNG website, www.ipopng.gov.pg/. 



283 



Trade Marks Regulation 1979, Schedule 4. 



^^'' Trade Marks Act 1 978, s55. 

^®^ Trade Marks Act 1 978, s49. 

^®® Trade Marks Act 1978, si 4. 

^^^ Trade Marks Act 1978, s53. For guiding principles as to 'deceptive similarity', see Ramu Sugar Ltd v WX 
Investment Ltd [2009] PGNG 20 citing Television Food Network, GP v Food Channel Network Pty Ltd (No 2) 
[2009] FCA 271, [138]. 

^®® Ramu Sugar Ltd v WX Investment Ltd [2009] PGNC 20. 

^^^ Trade Marks Act 1978, s55. This section contains additional exceptions. 

^^° Brinks Incorporated v Brinks Pty Ltd [1997] PGNC 52; N1567 (9 May 1997). 

^^^ Patents and Industrial Designs Act 2000, si 2. 

^^^ See Patents and Industrial Designs Regulations, Form 1. 

^®^ Patents and Industrial Designs Act 2000, si 9. As at October 201 1 , the application fee is K1 ,000 or 
K1 ,500 for applications including amino acid or nucleotide sequences. 

^^'^ Patents and Industrial Designs Act 2000, s27(2)(c). 

^^^ Patents and Industrial Designs Act 2000, s49. 

^^® The form required for application is Form 5 of the Patents and Industrial Designs Regulations. At the time 
of printing, the application fee is K500. 

^®^ Patents and Industrial Designs Act 2000, s39. 

^®® Patents and Industrial Designs Act 2000, s49. 

^^^ Patents and Industrial Designs Act 2000, s49(4). 

^°° Frauds and Limitations Act 1988, si 6. 

^°^ Examples of common law countries include Australia, New Zealand, England and Canada. 

^°^ Business Names Act 1963, s3. 

^°^ See the Investment Promotion Authority website. See the Intellectual Property Office PNG website, 
www.ipopng.gov.pg/. 

^""^ Business Names Act 1963, s8. 

^°^ Business Names Act 1963, s3. 

^°^ Business Names Act 1 963, s21 . 

^°^ S 18 of the Land Registration Act 1981 requires all transfers of land, leases, mortgages and charges to be 
in an approved form in order to be registered. S 2 of the Frauds and Limitations Act 1988 also states that no 
interest in land can be created or disposed of except in writing. 

^°® Associations Incorporation Act 1966, si 9(a). 

^"^Associations Incorporation Act 1966, si 9(b). 

^^° Companies Act 1 997, si 55(1 )(a). 



311 



Companies Act 1997, 155(1)(b). 



References 1 34 

© King & Wood Mallesons 



312 



Co-operative Societies Act 1 982, s30. 



^^^ Co-Operative Society Model Rules, Rule 62. 

^^'^ Fairness of Transactions Act 1993, s5. 

^^^ Goods Act 1951, s1 4(2). 

^^^ Goods Act 1951, si 5(2)(b). 

^^^ Goods Act 1951, si 5(2)(c). 

^^^ Goods Act 1951, si 6(2)(a). 

^^^ Goods Act 1 951 , si 3(a)(i) & si 3(b). 

^^° Goods Act 1951, s55. 

^^^ Independent Consumer and Competition Commission Act 2002, s108(1)(a). 

^^^ Independent Consumer and Competition Commission Act 2002, si 08(1 )(b). 

^^^ Independent Consumer and Competition Commission Act 2002, si 08(1 )(c). 

^^'* Second Hand Dealers Act 1968. 

^^^ Second-hand Dealers Regulation 1969, s3(1). 

^^^ Second-hand Dealers Regulation 1969, s3(3). 

^^^ Second-hand Dealers Act 1968, ss 13(1) and 13(2). 

^^^ Fairness of Transactions Act, si . 

^^® Fairness of Transactions Act 1993, s5(1). 



330 



Commercial Advertisement (Protection of the Public) Act 1976, s3. 



^^^ Printers and Newspapers Act 1956 and the Printers and Newspapers Regulations 1958. 
^^^ See http://pngmediacouncil.org. 
^^^ See http://pngmediacouncil.org. 



334 



Radio Spectrum Act 1996 and the Radio Spectrum Regulation 1997. 



^^^ Defamation Act 1962, s3. 

^^^ Defamation Act 1962, s2. 

^^^ Defamation Act 1962, s4. 

^^^ Defamation Act 1962, ss 6-1 1 . 

^^^ HIV/AIDS Management and Prevention Act 2003, Part 2. 

^'*° HIV/AIDS Management and Prevention Act 2003, s6(1). 

^^^ HIV/AIDS Management and Prevention Act 2003, s27(1)(e). 

^"^^ HIV/AIDS Management and Prevention Act 2003, s6(4). 

^'^^ HIV/AIDS Management and Prevention Act 2003, s28(4). 

^'^'^ HIV/AIDS Management and Prevention Act 2003, s6(2). 

^'^^ HIV/AIDS Management and Prevention Act 2003, s6(3). 

^'^^ HIV/AIDS Management and Prevention Act 2003, s7. 

^■^^ Such as applying for or during employment, admission an education institution, membership in an 
organisation, adoption or marriage, residency or citizenship. 

348 



HIV/AIDS Management and Prevention Act 2003, s9. 



References 1 35 

© King & Wood Mallesons 



349 



HIV/AIDS Management and Prevention Act 2003, s9(2). 



^^° C Stewart, Towards a Climate of Tolerance and Respect: Legislating for HIV/AIDS and Human Rights in 
Papua New Guinea', Journal of South Pacific Law (2004) 8(1 ). 

^^^ HIV/AIDS Management and Prevention Act 2003, s10. 

352 



353 



354 



HIV/AIDS Management and Prevention Act 2003, s1 1 . 
HIV/AIDS Management and Prevention Act 2003, s14(1)(a). 
HIV/AIDS Management and Prevention Act 2003, s14(1)(b). 



^^^ HIV/AIDS Management and Prevention Act 2003, s1 4. 

^^® HIV/AIDS Management and Prevention Act 2003, s14(2)(a). 

357 



358 



359 



360 



361 



HIV/AIDS Management and Prevention Act 2003, s1 5(1 )(b). 
HIV/AIDS Management and Prevention Act 2003, si 5(4). 
HIV/AIDS Management and Prevention Act 2003, s16. 
HIV/AIDS Management and Prevention Act 2003, s20. 
HIV/AIDS Management and Prevention Act 2003, si 8(1 ). 



362 



363 



364 



365 



366 



367 



368 



369 



370 



371 



372 



373 



374 



375 



376 



377 



378 



379 



380 



Lukautim 


Pikinini 


Child) Act 2009, Schedule 1 , si .1 


Lukautim 


Pikinini 


Child) Act 2009, Schedule 1 , si .2 


Lukautim 


Pikinini 


Child) Act 2009, Schedule 1 , si .3 


Lukautim 


Pikinini 


Child) Act 2009, s94(1). 


Lukautim 


Pikinini 


Child) Act 2009, s94(2). 


Lukautim 


Pikinini 


Child) Act 2009, s94(3). 


Lukautim 


Pikinini 


Child) Act 2009, s94(4). 


Lukautim 


Pikinini 


Child) Act 2009, si 32. 


Lukautim 


Pikinini 


Child) Act 2009, si 33(1). 


Lukautim 


Pikinini 


Child) Act 2009, Sched 1.5. 


Lukautim 


Pikinini 


Child) Act 2009, si 34. 


Lukautim 


Pikinini 


Child) Act 2009, s45(1). 


Lukautim 


Pikinini 


Child) Act 2009, s46(1). 


Lukautim 


Pikinini 


Child) Act 2009, s46(2). 


Lukautim Pikinini 


Child) Act 2009, s45(2). 


Lukautim 


Pikinini 


Child) Act 2009, s45(3). 


Lukautim 


Pikinini 


Child) Act 2009, s1 20. 


Lukautim 


Pikinini 


Child) Act 2009, si 21. 


Lukautim 


Pikinini 


Child) Act 2009, s1 25. 



References 



136 
© King & Wood Mallesons